Can You Remove a Repossession from Your Credit Report?

A vehicle repossession can affect your life in numerous ways. Not only can the stress of losing your vehicle take its toll, but its long-term impact on your credit report can make your overall financial picture challenging. It’s easy to feel overwhelmed by a vehicle repossession. However, there are steps you can take to move forward.

What is a Repossession?

A repossession happens when you fall behind on payments for your vehicle. There are many reasons people miss payments; poor money management, the loss of a job or an unforeseen financial emergency. When you’ve missed too many payments, the lender will “repossess” the vehicle. In other words, you surrender it or they come take it away.

The best course of action when you find yourself falling behind is to try and deal before a repossession happens. The easiest way to do this is to contact the lender and tell them what’s going on. Good lenders will give you some options. But if you contact too late, you’ll have some work to do.

What Happens After a Car Repossession?

After your vehicle gets repossessed, a couple things can happen:

• You may be able to get the car back – Talk to the lender and get caught up on payments. Sometimes when you do this you can get the vehicle back. If you don’t have enough cash flow, you may have to get creative. Try working odd jobs or getting a second job. Sell unnecessary belongings, or borrow from a friend and family member (but ONLY if you can pay them back). If you do get the car back, make sure you evaluate whether you can afford it or not. If you can’t, take the proper steps to trade-in, sell or refinance to ensure you don’t get into worse financial situation. One way you may be able to lower the payment is to ask the lender to extend the loan. Chances are, they don’t want to sell the car at a loss, which often happens.
• The vehicle may be sold at an auction – If this happens, the vehicle may sell for less than what it’s worth, and you may owe the lender a deficiency amount. Find out what it is and expect to pay it off. If you don’t, it can further destroy your credit. You should also know your rights. The car shouldn’t get damaged in the process, and you still own all the contents inside.

Can You Get the Repossession Off Your Credit Report?

There is no clear-cut answer to the question of getting a repossession off your credit report. You may be able to, you may not. No matter what though, you can try. Here are a few steps you can take:

Step One – Negotiate new payments. When you get the right person on the phone, it’s amazing what you can do. Find someone who has the power to negotiate new payments and remove the repossession from your credit report. The key is to get everything in writing so they stay true to their word.

Step Two – Dispute the repossession on your credit report. If step one doesn’t work, try doing it yourself. Open a dispute with the credit companies. The best way to be successful is to find inaccurate information, whatever it may be. It could be dates, balances, payments, account numbers or anything that isn’t correct. The lender will have 30 days after that to answer and correct the information, otherwise, it will be removed.

Step Three – Get professional help. If the above two steps don’t work, enlist the help of a professional. Work with a reputable credit repair company.

Rebuilding Your Credit After Repossession

Sometimes it’s impossible to remove a repossession. That means your best course of action is to rebuild your credit. Rebuilding credit takes time, but the internet now offers consumers endless resources. Companies like Credit Karma monitor and give you advice on what you can do to improve your credit score. You’ll also have to create and stick to a budget so you can start paying down your debt. When the time is right, try to get a new vehicle and loan. If you have a hard time with traditional lenders, you may have to find lenders that deal with poor credit or sellers that offer in-house financing.

A repossession may seem like the end of the world, but it isn’t. While it’s best to head it off if possible, you can still restore your credit health after the damage has been done with some time and effort.