How Long Does A Repo Stay On Your Credit?

How Long Will a Repo Stay on Your Credit?

Having your car or another asset repossessed is one of the worst experiences that a person can face in life. In addition to losing your car or any other asset that you pledged as security for the loan, repossession also impacts your credit rating and remains on your credit file for years. This can render it extremely difficult to secure other forms of credit, credit cards, home loans, renting an apartment, and so on. But just how many years does a repo stay on your credit?

How Long It Takes A Repo To Remain On Your Credit Report?

A repo can remain on your credit report for up to seven years starting from the time when the account first became overdue. Most of the leading consumer credit reporting agencies such as Equifax, Experian, and TransUnion will report the repo on your credit report for this duration because repos are considered severely negative credit incidents.

Over the 7-year duration, the effect of the repo on your credit score will fade out progressively though a consistent credit repair will improve your score in case you are timely in honoring all your other debts. However, it will continue to remain a part of your actual credit report and is visible to every lender who runs a credit check on you for the entire 84 months.

Understanding How Reposoes Affect Your Credit Score?

It also negatively impacts credit scores while remaining on a full credit report for 7 years. In the first year after defaulting on the loan secured by the repossessed asset, your credit score may plummet below 100 points. This makes it almost impossible to get approved for better loan rates or get new credit lines.

The effect is slightly different depending on your credit history and the credit score that you had before the report was made. Some may only experience a decrease in their credit score of between 50-75 points if they already maintained good credit before the repo. However, if before defaulting your credit was ‘fair’ or poor, then your credit score could drop by 150 points or more, sliding into deep subprime.

In either case, a repo is one of the most adverse credit events that can occur in the marketplace. Since 35% of your FICO or VantageScore is based on payment history alone, falling seriously behind on a loan is very costly. Late payments that resulted in repossession also remain different from the repossession action when computing your score.

How To Rebuild Your Credit After A Repo?

The good news is that repossessions need not put your credit health in the deep freeze. Here are some tips for starting to rebuild your score after a repo.

• Pay Off Any Balances Still Owed: To determine if you still have outstanding loan balances even after your car or the asset tied to that credit was repossessed, ensure to speak with the initial lender. If you are in a position to pay off these balances down to zero, then this is a sure way of beginning to repair your credit status.
• Get Current On All Other Accounts: Ensure that to continue paying all the other credit card balances, auto loans, mortgages, and any other service bills on time and as they arise in the future. Payment history is one of the largest contributors to credit scores, and a positive history is better.
• Keep Credit Card Balances Low: Another factor that can affect your credit is having high balances on your credit cards. Ideally, it is wise to do everything possible to have balances below 30% of the card’s limit on each of the cards. If at all possible, pay them down as quickly as possible.
• Limit New Credit Applications: When you apply for credit, the credit company pulls your report, and this is considered a hard inquiry that can slightly affect your score. Do not apply for any credit that is not necessary for a while as you work on your credit.
• Use Secured Credit Cards: Secured cards are cards that you need to deposit some cash with the amount being your credit limit and which also serves as security in case you are unable to pay back the money. However, it is possible to use credit responsibly to prove that one can handle credit again.
• Let Time Pass: As already stated, the loss due to a repossession decreases year by year as the above calculations show. It helps to restore the score if you do not make any missed payments in the next 7 years on other credit accounts.

How to Check whether a Repo is Still on your Credit Reports?

Given that repos remain on your credit reports for a long time, it is wise to monitor all three main bureaus now and then. The first step is to visit the website www.annualcreditreport.com where you can receive one free credit report from each of the three reporting agencies – Equifax, Experian, and TransUnion. These will enable you to confirm whether a repossession or any other adverse entry, is still reflected in your credit report.

You can also obtain credit monitoring services that enable you to log on to Internet sites and view your most recent score and report from each bureau. It allows you to receive notifications whenever there are changes, new information is included, or when an item has finally disappeared from your reports. The following options relate to DIY monitoring Credit Sesame, IdentityForce, and a host of other consumer-oriented solutions.

How to get a repo removed from your credit report?

However, it is impossible to completely delete or remove an accurate repossession if it still falls within the seven years of the reporting period provided for by the Fair Credit Reporting Act. If you pay for help from a credit repair agency and it promises to somehow remove reports from your credit history, it is a lie and a violation of the law. Consumers and companies cannot expunge information they believe is legitimate before it reaches an expiration date on credit reports.

With that said, if you do notice any inaccuracies or errors relating to a repo on your credit reports – such as the date of first delinquency being reported incorrectly – you have the right to initiate a dispute. Once contested, the repositories are required to conduct investigations within one month. If the original repo details cannot be confirmed as accurate, the post can be deleted or the information corrected through this investigation phase.

However, removal requests via disputes are only possible if the information submitted is false or cannot be substantiated. But for valid, true repossessions, early removal – tragically – is not possible. Steer clear of any agencies that claim they can get around this prohibition in some way that seems shady to you.

The Bottom Line

Having your car or any other property repossessed is one of the worst things that can ever happen to your credit status as well as score. Like the majority of other forms of late payments and defaults, repossessions are also reported on your Equifax, Experian, and TransUnion credit files for a rather long time of 7 years from the initial day of the payment miss that led to the repo. They can reduce your credit score by over 100 points or more in the first instance.

Fortunately, the negative impact starts reducing year by year, and there are ways of trying to repair credit afterward repo. Being careful with new credit, making all payments on time, paying down balances, and waiting are the best ways to get fiscally well and get approvals again in the future. A discipline of good financial behavior creates chances for comebacks in the future.

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