Education Center

What is a repossession?

Repossession is the lender’s legal right to take property from you if you don’t pay the bill as agreed. The lender then tries to sell the property to recoup some of the money he lost.  For example, if you miss three or four car payments and don’t contact the lender, your car will likely be taken over.

Can a repossession be removed from your credit report?

Repos stay on your credit report for 7 years. If you want it to be removed sooner, you will have to get creative.  It is possible to remove a lien from your credit report by negotiating with the lender, successfully filing a dispute, or hiring Chireo Credit Restoration.  The easiest way to eliminate a recovery on your credit is by hiring a credit repair company, such as Chiereo Credit Restoration. They know the ins and outs of removing repos from credit reports

How to delete a repossession from your credit report?

1. Negotiate new payment terms

The best thing to do is keep in touch with the lender. Don’t ignore phone calls or requests for payment. Instead, talk to your lender. Let them know what is going on, why you were left behind. The lender may make different arrangements. Between you and me, they don’t want your car back.

It costs them money to keep it, market it, and sell it. They come out on the losing side. If there is a way to meet your loan, they may work with you. They may offer lower payments in the longer term or a lower interest rate to reduce the payment, but keep the same term.  Some lenders add missing payments to the end of the loan, allowing you to start over and extend the term by adding the number of months you missed.

You won’t know until you ask. What’s the worst they can say? ‘No’?

2. File a dispute

If some of the information related to the repository is not accurate, file a dispute. Errors can mean they misspelled your name, reported the wrong payment dates, reported the wrong outstanding balance, or any other errors you might find. Dispute the error in writing (each office has an online process) and provide proof of why you think the information is incorrect.  The credit bureau has 30 days to validate the information or it must remove the repository from your credit report. If they validate it, but find that the errors you reported are bugs, they should also remove the repository from their report. “

3. Hire a credit repair company

Dealing with the credit bureaus is too overwhelming, consider hiring a credit repair company. Chireo Credit Restoration will find gaps in the reports. They know how to look for even the smallest mistakes.  Most of what they do is outlined in the steps above, but they have the skills and experience to work with the smallest details that can cause the account to be removed from your report.

How will a repossession affect my credit score?

Repossessions like most negative credit information, stay on your credit report for 7 years. It lowers your credit score the most during the first few years and gradually decreases. If you have good credit otherwise (you make your payments on time and don’t over-extend your credit), your credit score should recover after a couple of years.  Repositories do the most harm to people with good or excellent credit scores. You can lose up to 100 points if you have a credit score of more than 700.  If you already have average or poor credit, you won’t lose as many points, but you will still have a repository on your credit report.

Why do repossessions occur?

Banks take back your property when you stop making payments. You agree to make payments on time every month. If you don’t, the bank can cut your losses and get the item you bought back.  Banks do this when they believe they cannot get the funds from you. You may or may not have a warning that the repossession is occurring; most states do not require it.

Can I get a car loan after a repossession?

Some lenders may grant you a loan after a repossession, but be prepared to pay with interest! It is best to remove the repository from your credit report first. Try to negotiate with the lender or get into a dispute. If that doesn’t help, work with a Chireo Credit Restoration to remove the repository from your report.  In the worst case, you may have to wait the 7 years until the repository goes down and then you can get a car loan.

Can I get a mortgage after a repossession?

Like any loan, mortgage lenders look at your credit history. If they see a repossession, they may be hesitant to grant you a loan.  Lenders are likely to ask questions about the repository and its causes. They may also want proof that you have fixed the problem and are financially stable. Whether or not you can get a mortgage really depends on your credit score.  The longer you wait after the repository, the less damage it will do to your credit score, increasing your chances of mortgage approval.

Is voluntary repossession better for your credit?

There are two types of reruns: voluntary and involuntary.

As you probably guess, volunteering means you return everything you bought (think a car or a house) with no hassle. The banks don’t want to come looking for you, you hand over the property. Involuntary means that you did not deliver the car and the bank came out in your favor. While a voluntary repossession helps put your mind at ease (you don’t have to worry about waking up to your missing car), it doesn’t affect your credit any differently.

Do I still owe money after a repossession?

Yes, returning the car does not necessarily satisfy the money you owed. If the bank reports your vehicle and you owe $ 10,000, and they can only sell it for $ 5,000, you still have to pay the remaining $ 5,000.  If you can’t agree to a payment or don’t figure out how to pay it, they may sue for the difference.

How to prevent a repossession

While no one can predict what will happen in the future, there are a few ways to prevent a recovery: Only borrow what you can afford. Think long term. If you borrow for five years, think about the payment you accept. Will it go down to an income in the next five years? Could your job landscape change? Are you going to assume other important expenses in that time (university, mortgage, etc.)?

Set up automatic payments. Don’t leave your payments to chance. Set up automatic payments, so you never miss one. Talk to the lender. If you can’t make your payments, talk to your lender – don’t ignore the problem. They may be able to work something out with you, be it a payment arrangement or a longer term.

How can I improve my credit after a repossession?

If you have to go through a repository, it’s not the end of the world. Do your best and use these credit tricks to improve your credit:

Pay all future bills on time. Don’t miss any payments. Your payment history is 35% of your credit score.
Don’t close old revolving accounts. It’s easy to close credit cards so you can’t use them, but that hurts your credit score. Keep them open and close them somewhere that you cannot easily access.
Do not charge more than 30% of your credit limit and pay off your credit card balances as quickly as possible.
Do not apply for a new loan unless it is absolutely necessary.
Conclusion: how to remove a recovery from your credit report

While a repossession is not a good thing, there are ways to remove it from your credit report, either quickly or simply by waiting.  Make sure you know your rights. As a consumer, you are protected by the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA).  Your best option is to prevent it by working with the lender. Most lenders will try to work it out with you if you are honest and communicate with them.  However, if it comes down to that and you have a repository, you can get your credit back. Strategic credit repair is the best thing to do right now.  While you wait, do what you can to rebuild your credit. Show lenders that you are financially responsible despite the mishap and rebuild your credit score step by step.