How long does a repossession stay on your credit report?
A car repossession stays on your credit report for up to 7 years. While the impact that it has lessens over time, it can negatively affect you the whole time it’s on your report.
How does a repossession affect your credit?
Having a repossession on your credit report can be very damaging to your credit score. A repossession may contribute to you not being able to get a loan for things like cars, credit cards, home loans, or anything else that requires a credit check.
Why do repos happen?
A car repossession typically occurs when you stop making payments on an auto loan.
When you get an auto loan, the bank you have the loan through technically owns the car until the loan is paid off in full. If you do not pay the loan in full and stop making payments, then the bank can essentially take their car back from you.
Your creditor can seize your vehicle at any time once your loan is in default. In most states, they don’t even need to notify you that they will do this. Creditors will typically then sell the vehicle to try and recoup the money they loaned for its purchase.
What if it was a voluntary repossession?
Whether they have taken your car or you have voluntarily surrendered it, it makes no difference when it comes to your credit. The effects of the repo are just as damaging to your credit score.
Can I be sued for the remainder of the balance?
In addition to seizing your vehicle, your creditor can also sue you for the additional amount they lack in order to pay off their original investment.
For example, let’s say you still owed $15,000 for a car and that car got repossessed by the bank. The bank then sold that car for $10,000. They could still sue you for the remaining $5,000. The bank will almost certainly sue you for the remainder; then you will also have a judgment on your credit report.
Can a repo be removed from your credit report?
Yes. It is possible to have a repo removed before the seven years. You can do one of two things when you are faced with a repossession.
Sometimes a bank will allow you to renegotiate your payment terms so that you can afford to pay them more easily. If you can convince them to do this, they will sometimes remove the repossession for you.
Make sure you get it in writing that they will delete the repo from your credit reports once you have paid it in full.
Can I get a car loan after repossession?
Yes, but first you must get it taken off your credit report. There are very few lenders that will give you a car loan with a repo on your credit history.
If they do, the amount of interest you’ll be paying will be enormous. It’s possible that you will pay 3x to 4x what the car is worth.
Filing a Dispute
Another thing you can do is file a dispute with the credit bureaus. If the lender can’t verify that the repossession is valid or fails to answer the dispute within 30 days, then they must remove it from your credit report.
There are good companies out there like Lexington Law that can help you remove negative items like repossessions from your credit reports. They have many years of experience with helping people and they make sure the job gets done correctly.
Letter from Transunion
Lexington Law Client Testimonials:
I must commend your firm and staff, on doing an exemplary job on my credit history. For the few months that I have been a client, their reputation represents that of professionalism, courteousness, and people oriented. I am extremely happy with the progress that has been made. Keep up the great work.— R.S., Lexington client
I am extremely satisfied with the service you offer your clients. I feel your firm is very committed and dedicated to obtaining results. Since I have been a client, I have been astonished by the amount of deletions you have been able to obtain for both my husband and myself.— K.L. & B.L., Lexington clients
I would never have been able to achieve the results you have on my own and hold down a full-time job at the same time. I look forward to getting your updated emails just to see how many more negative entries have disappeared.
Discount for Family Members, Couples, and Active Military!
They are now offering $50 off the initial set-up fee when you and your spouse or family members sign up together. The one-time $50.00 discount will be automatically applied to both you and your spouse’s first payment.
Active military members also qualify for a one-time $50 discount off the initial fee.