Depending on where your credit score stands, a car repossession could drop it as much as 100 points. In addition, a repossession stays on your credit reports for seven years, which makes getting approved for a future auto loan more difficult. The good news is that the impact a repo has on your credit lessens as the years go by.
Removing a Repossession from Your Credit Reports
If your vehicle was repossessed, you may be wondering if you can remove the repo from your credit reports before the seven years is up. If it's accurately listed, you simply need to wait the seven years – it can’t be removed before. But, if you feel the repossession is listed inaccurately, you have two options to attempt to remove a repo from your credit reports:
- Reinstate – Not all lenders allow you to reinstate a car loan, but it doesn’t hurt to try. To reinstate the loan, you need to make all missed payments, pay any penalties, and pay any repo-related fees. It’s important you ask your lender if they can remove the repo from your credit reports before you attempt to reinstate the loan. If you reinstate the loan, and the lender doesn’t remove the repo, it can remain on your reports for the seven years.
- Dispute – If the repossession listed is inaccurate, you can file a dispute with the reporting credit bureau. The credit bureau must investigate your claim within 30 days. If they don’t send back a decision or verify the repo within 30 days, by law, it must be removed from your reports.
Preventing Auto Repossession
While it’s important to know what your rights are during and after repossession, and how you can get your vehicle back, you should know that you can sometimes prevent a repo from happening, too. The best way to go about this is to talk to your lender.
When you keep your lender in the loop about your financial situation ahead of time, you may be able to prevent a repo from ever happening. Most lenders would rather help you out than let the car be repossessed. Some lenders may allow you to roll over the upcoming payment into the next one, or even allow you to skip it and tack it on to the end of the loan. You aren’t going to know what your options are unless you ask.
The Bottom Line
Don’t be afraid to talk to your lender about any struggles or concerns you have about paying for your auto loan. Even if they’re unable to help, they appreciate you taking the initiative.
If you have a repossession on your credit reports, and you’re worried it’s holding you back from getting financed, we want to help. Auto Credit Express is teamed up with special finance car dealerships all across the country. Our partner dealers are experts at helping buyers in unique credit situations – like repossession – get financed.
We'll get right to work matching you with a dealership in your area if you fill out our secure and free auto loan request form.