How To Get A Repo Off Your Credit?
Having a repo removed from your credit report
In as much as it is embarrassing to have a car or any other asset repossessed it is equally as financially and emotionally draining. Not only do you lose your property, but a repo also pulls your credit rating down severely.
The good news is that there are things you can do to get a repo removed from your credit report. However, it is not always 100% effective but takes some perseverance and patience in some instances. Here is a guide on how to get a repo deleted:
Do nothing
First, understand that repossession drops off your credit report on its own after 7 years. If the repo is relatively new, you might just sit tight and wait for it to pass. Maintain responsible credit behavior such as paying on time, and keeping credit utilization rates low. The repo will result in less and less harm and after 6 or 7 years the repo rate will fall to zero on its own.
If waiting is not feasible, then it is advisable to take some action to ensure that the repo is deleted at the earliest.
Seek assistance from the credit bureaus.
Most consumers can receive at least one free credit report each year from each of the three major credit bureaus: Equifax, TransUnion, and Experian at annualcreditreport.com. So when you are reading your reports, search them meticulously. Check that the date, amount, and any other details on the repo are correct.
If the repo is listed incorrectly in any of the repo reports, dispute with that bureau demanding them to correct or remove it. The agency is obligated by federal law to investigate the case within 30 days of its filing. The moment they realize that the information is incorrect or incomplete, they have to delete or modify the entry.
Forward a letter to delete with good intentions
It is also important to note that requesting the creditor or the lender who reported the repossession to the credit bureaus to remove the entry from your credit reports is possible even if the repo details are true. This is called a ‘goodwill deletion letter. ’ It is an appeal to the creditor to delete the negative mark.
These letters work best if the following apply.
- The repo was a long time ago
- It was an individual financial loss
- You have good credit since
- There is a positive credit history with that creditor
Stress the fact that the old repo negatively impacted your credit and you cannot get loans. Inform them that one bad record does not wipe out years of good credit behavior. When asking for the deletion, ensure that the request is polite but assertive and justifies the deletion as a goodwill gesture since both parties acted in good faith.
Negotiate with creditors
The other possibility could be attempting to enter “pay to delete” agreements with repossession agencies or buyers of the debt. This includes promising to make payments to cover all or part of the deficiency balance after they sold your repossessed asset in return for having the detrimental entry deleted from your credit reports.
Always ensure that any such agreement is in writing before you make any payments towards the agreement. You want legal assurance that payment will lead to the deletion of the repo tradeline as stipulated by the law. In other words, you may find yourself paying the price for credit damage even if you make a payment.
However, try pay-to-delete only if you can afford the payments following your agreed-upon contract.
Challenges to the inaccuracies provided to the CFPB
With federal student loans or loans by banks and credit unions, you can report errors on your credit reports including repossessions by filing a complaint with the Consumer Financial Protection Bureau. CFPB forwards the complaint to the relevant financial institution and assists the institution in investigating and correcting errors. Implementation of dispute processes through this intermediary federal agency can help lenders correct credit report mistakes.
Appeal lender decisions
If negotiating with the creditor to get the repo to be removed from your credit report is inconsequential, then go to the next level of authority within the organization. Taking the message a notch higher demonstrates your commitment to getting what you want and that the refusal was unreasonable. If you have more information, then share it with the group. Stay calm and be assertive that the repo hurts your credit and financial standing. Appeals might help creditors reverse certain notations they made if pursued incessantly.
Add an explanatory statement
If for some reason despite your best efforts you cannot get the blemished repo record deleted, then you should ask to have a statement added to your credit report. This statement (up to 100 words) is the explanation of the circumstances that led to the failure to pay as agreed such as the difficulties you encountered. It provides reasons and places the repo in the most favorable light.
Certain potential creditors and lenders will not bother to read such explanations; others might look at the whole story behind a specific adverse credit listing more favorably. However, there is nothing wrong with having the statement added to your credit file for whoever is accessing your report. And having one might make you feel somewhat better about a mistake you cannot erase.
Improve your scores
Getting a repo deleted from your credit history is very beneficial to your scores, as it eradicates a severe marker of late payment. However, even if you can’t get the repo deleted, pay your credit bills responsibly in the future. Making timely payments, keeping credit utilization rates low, and having a good credit mix will help to offset the old default.
Do not incur more repossessions or late payments that would accumulate more damage. Maintain accounts open rather than deactivating the card that is not in use. Eventually, the prior default issue will become less of an issue given the pile-up of positive data. Then car or home loan approval odds are gradually enhanced even if repossession remains part of the credit report. Spot the progress often by referring to the free credit reports.
A repossession can crucify credit standing and borrowing potential for years. The above actions, however, increase your chances of challenging, bargaining, or explaining away the negative item, or at least, getting over it. Therefore, if your car or any other property was repossessed, do not lose hope. Instead, start following the game plan outlined here to gradually build your credit and move past the default for good.
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