How Long Do Repo Stay On Credit?

Having your car repossessed is a stressful and embarrassing situation. In addition to losing the car, repossession can negatively affect your credit score and stay on it for several years. This lasting mark hinders the chances of securing other loans, credit cards, mortgages, and many other financial instruments in the future.

Now that we know when a car repossession occurs and what it entails let us find out how long a car repossession stays on your credit report. What steps can you still take to ensure that it comes out faster? Let me tell you all you must know about repossessions and your credit as well as how to begin with the recovery process.

How Long Do Repos Stay on Your Credit?

The Fair Credit Reporting Act FCRA has it that records of repossessions can be reported on your credit report for up to seven years from when they initially went bad. This is the time limit within which some credit-related adverse items such as payments made more than one month late, collections, and repossessions are allowed to appear in your report before they are deleted.

The impact of the repossession varies depending on how long ago it occurred.

• 0-1 years: Severe negative effect, may include 100-300+ point score decrease
• 1-3 years: It has a moderate negative impact, the scores drop as time passes
• 4-5 years: Low to moderate damage
• 6-7 years: Generally, it has little or no impact just before it drops off the report.

Thus, if you lost your vehicle in the last 12 months, this factor will impact your credit scores and loans the most at this moment. Thus, as credit is gradually rebuilt over the next several years, the degree of delinquency will be less severe. However, it can still make it more difficult to get approved.

Once the seven-year mark hits, the repossession will fall off your credit reports with Equifax, Experian, and TransUnion on its own. At this point, your scores will also improve slightly as the negative mark is not included in your credit history anymore.

How to Dispute a Repossession and Get It Off Your Credit Report More Quickly?

If you want a repossession removed from your credit reports before the seven years, it can be very difficult. In most cases, the credit bureaus are very willing to delete negative marks early if only you can provide some kind of an error or a mistake in reporting.

With that said, here are a few methods that may get a repossession deleted faster.

• Dispute errors in the reporting: If there is inaccurate information such as the date when the record was opened, the creditor’s name, the amount of debt, etc. in the repossession listing, you can challenge such information with credit bureaus. If the agency that reported that you had your repossessed car cannot substantiate the accuracy of that information, the credit bureaus may allow you to have the information deleted from your credit record.
• Negotiate with your original lender: When you want the earliest chance of removal, reach out to your initial auto lender or financing company that initiated the repossession process. State your case and why you think the repossession is still prejudicial to your chances of being granted credit. Gently inquire if they would mind asking for its deletion from the credit reporting bureaus. If they do so, they have to write the withdrawal of the claim directly to Equifax, Experian, and TransUnion.
• Hire professional help: Consult with a licensed credit repair provider who deals in deletion negotiations of negative entries. They will write goodwill letters to your lenders, challenge false information in your credit files, and offer the legal know-how to make the credit bureaus delete the listings before the time is due. Stay away from shady repair companies that ask for upfront money – professional services only get paid based on results.

How to Rebuild Credit After Car Repossession?

The good news is that repossessions do not linger indefinitely in your credit history. If seven years sounds much too long, focus on rebuilding and strengthening your credit right away to minimize its hit.

• Pay any remaining deficiency balance: Call the lender to learn whether you are still responsible for paying any balance on the car that was repossessed. This balance should be paid together with a payment plan in place that will enable you to avoid being sued by the lender or have the account PORTED to a collections agency.
• Pay all other accounts on time: Pay at least the minimum amount due on all the current credit cards, auto loans, and any other financing before the due dates. Since on-time payments are reported to credit reference agencies, timely payments will gradually help build a better credit profile in the eyes of potential lenders.
• Lower credit card balances: Credit card balances should be kept significantly lower than the credit limits to minimize the impact it has on the credit utilization ratio which is among the most critical factors in determining credit scores.
• Become an authorized user: Get a family member with good credit scores to include you as an authorized user to one of the oldest credit cards that he or she owns. In addition to this, as an authorized user, the positive history of that particular credit card will be reported to the credit bureaus to counterbalance the negative impacts.
• Limit new credit applications: Every time you apply for a loan or f credit card, points are deducted from your score. Do not apply for new financing and incur more difficult inquiries until your credit score has increased.
• Monitor your credit reports: This should be done to take note of any items that should be disputed to make sure your credit scores are as high as possible. You can get one free credit report from each bureau once a year at www.annualcreditreport.com.

Use your credit wisely for a few more years or until the sting of a repossession no longer bothers you. Remember one thing, however, negative information will remain on your credit report for several years. It will take time to fix your credit, but work on rebuilding your credit and your scores will be heading in the right direction again.

Ready to boost your credit score? Call +1 888-804-0104 now for the best credit repair services near you! Our expert team is here to help you achieve financial freedom and improve your credit. Don't wait—get started today!