How do repossessions affect your credit?
Having a repossession on your credit report can be very damaging to your credit scores. 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.
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 effect you the whole time it’s on your credit report.
Why do repos happens?
A repossession typically occurs when you have an auto loan that you stop paying the monthly payments on. 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 report. The effects of the repo are just as damaging to your credit.
Can I be sued for remainder of the balance?
In addition to seizing your vehicle, your creditor can also sue you for the additional amount they are lacking in order to pay off their original investment. For example, if you still owed $15,000 for a car and that car got repossessed by the bank and the bank then sold that car for $10,000; they could also sue you for the remaining $5,000 they invested originally. The bank will almost certainly sue you for the remainder and 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 from your credit report before the 7 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 are able to convince them to do this, they will sometimes remove the repossession from your credit report. Make sure you get it in writing that they will delete the repo from your credit report once you have paid it in full.
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 it can be removed 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 report. They have many years of experience with helping people and they make sure the job gets done correctly.
Can I get a car loan after repossession?
Yes, but first you must get it removed from your credit report. There are very few lenders that will give you a car loan with a repo on your credit report. 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.
How can I improve my credit scores after a repossession?
A while back I went through some pretty rough times financially. I found myself unemployed and my bills began to accumulate. I was barely able to provide for my family – much less pay my bills. My credit cards went into default and things just got worse from there.
I started getting collections calls at all hours of the day. The bank started threatening to foreclose on my house and repossess my cars.
It took me several years to get my financial situation back in order. At first, I wasn’t able to buy a home or get a vehicle. It was hard for me to even find a place to rent since a lot of my would-be renters wanted to check my credit score. The situation was very frustrating to me, at least until I discovered Lexington Law.
After being told about Lexington Law, I decided to give them a call to see if they could help me out. At this point, I was willing to try anything to repair my bad credit.
My contacting Lexington Law was really a turning point for me. Their professional staff was extremely helpful and after a few weeks I began to see a difference in the items listed on my credit report. Several items were removed and my credit score began to climb. Having higher credit scores has already helped me save money.
Repossession Deleted from My Credit Report:
My credit scores have dramatically improved since there are no longer any negative accounts on my credit report. Here is a snap shot of my credit scores since I signed up with Lexington Law:
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, Lexington Law Firm 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 with the amount of deletions you have been able to obtain for both my husband and myself. I would never have been able to obtain 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.”
— K.L. & B.L., Lexington clients
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