Can I remove a car repossession from my credit reports?

When it comes to getting new credit, a repossession can really hamper your ability to take out another car loan, as auto lenders view a recent repo as a red flag. A repossession stays on your credit reports for up to seven years – that’s a long time! However, with each passing year, the impact on your credit score decreases and it eventually disappears from your reports.

Once your car has been picked up

After a vehicle repossession, you might be wondering how it got into this. Usually, a repo is a response to a car loan default, which is caused by too many missing payments, or even just one payment (depending on the language of your loan agreement).

Once your car has been taken away by the repoman, it is usually ready for auction. Lenders typically sell repossessed vehicles in order to cover your loan balance.

If you want to collect your car, you may be able to get in touch with your lender before it is sold. In many cases, your lender should let you know when and where the vehicle is to be sold.

Sometimes a lender gives you the option of reinstating your auto loan if you agree to make up for missed payments or if you can pay off the balance in full. For many people, however, this is not an option.

Once the car has been repossessed and auctioned off, the repo is likely already on your credit reports or about to be reported, which can drastically lower your credit score. Not only does your credit report likely reflect the repossession, but the missed or late payments that led to the default are also hurting your credit.

Once the repo is flagged on your credit reports, your vehicle is probably long gone – taken, sold, and then reported on your credit reports. This means that the possibility of negotiating repossession with your auto lender is probably out of the question.

If you are in the situation where you still have your car, but are concerned about a default, contact your lender and ask your options if you are trying to overcome difficult times.

Can you delete a repository from your reports?

Once a repossession has taken place, it’s difficult to remove it from your credit reports.

If you want to remove the repository from your reports, and it was legitimate, you’re probably going to be stuck with it. There are ways to remove accounts from credit reports, but that involves proving that the account is inaccurate or out of date.

When you want to remove something from your reports, it’s called filing a case. Often times, you need to provide proof that the account you are disputing is incorrect. If you have a bank statement proving that you have paid an account or a statement that proves that you have made your payments, you can send them to the credit bureau reporting the incorrect account, and they remove the error from your credit reports if they find out that it is a real mistake in their investigation.

However, a repossession that took place because you defaulted on your car loan is not likely to be removed. If you have missed an overpayment and it has been reported and proven by the lender, repo removal is probably not possible. Typically, once you file a dispute, the credit bureau must investigate the claim within 30 days. The heart of a dispute is that you are saying that what is shown on your credit reports is incorrect or inaccurate.

If you can prove that the rework was a mistake, you could probably remove the repo from your credit reports. If the lender has repossessed your vehicle and you haven’t missed any payments, you can prove it with receipts and bank statements showing you made your payments on time, get your car back, and then ask them to remove the pension from your credit reports. It is rare, however. The repossession process is expensive and time consuming for the lender, so an accidental repo is unlikely.

If your repossession was the result of a default, it won’t show up on your credit reports forever! Almost anything negative on your credit reports falls off after seven years. Each year after repoing, the negative impact on your credit score decreases. If you need another vehicle, you still have financing options even with a repossession on your credit reports.

Car purchase options after a repo

Since a legitimate repossession is here to stay on your credit reports, you have a few other options to check out for your next car. Here are three avenues to explore:

  1. Private seller or pay cash – Working with a private seller and paying in cash could be a way to skip the credit check required by most auto lenders before you can get financing. A private sale may not give you the greatest security or peace of mind that the vehicle is in good condition, but when you need transportation and lenders don’t give you the time of day due to ‘recent repossession, worth checking out. Since this is a private sale, it will not be reported and your credit reports will likely not be managed by the seller.
  2. Buy here pay here (BHPH)BHPH dealers use internal financing, which means your dealership is also your lender. Most dealerships separate the two roles, which means you usually need to find a third party lender or work with lenders who are registered with the dealership, not in a BHPH used car fleet! They do it all themselves, and that means they usually skip the credit check, so you’re likely to get approved for funding if you have the income and a large down payment, even with a recent repo. . However, BHPH dealers may not report your payments on time to the credit bureaus, which would not help repair your credit.
  3. Subprime lender – These third party bad credit auto lenders are registered with dealerships that have special financial service. They check your credit, but they also look at many other aspects of your financial situation to determine your ability to take out a car loan. This means assessing your residency history, income stability, credit reports, and requiring a down payment. If your repo is more than a year old, a subprime lender may not be able to work with you right away, but this can be a credit repair opportunity. These loans are reported to credit bureaus so that a good payment history will rebuild your credit.

Get back on the road

If you’re ready to put a repossession behind you and take out your next car loan, start here with Auto Express Credit. We have a nationwide network of dealers who work with bad credit lenders.

To get started, fill out our non-binding, secure and free form car loan application form. We will look for a dealer in your area who can work with unique credit situations.

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