How to Get a Repo off Your Credit Card: The Ultimate Guide

Having your car towed for defaulting on your auto loan will have you trying to figure out how to get a repo off your credit card. That’s some very important information because a repo will stay on your credit report for up to seven years after the default is reported to credit bureaus.

The dent it leaves on your credit score will also make it difficult to access new lines of credit. If you do manage to, it may be at higher interest rates.

How Repossession Happens

Many only know of repossession when a bank takes back a car. When a client defaults on payments, the bank can send someone over to collect the vehicle, usually without prior notice.

You can also choose to voluntarily give the vehicle back. This gives some kind of control or order on how the repossession occurs. 

While both may be painful, one is much less embarrassing and dramatic. They, however, both carry the same weight when it comes to their impact on your credit score. 

In the event that selling the car doesn’t enable the bank to fully recover its money, you will still be left paying a car loan with no car plus a bad credit rating. It becomes more difficult to maneuver. 

The Repo Effect on Your Credit Score

A repo means you had a debt and stopped making payments for a while. The lender then repossessed the car to recoup their cash.

The whole premise of the credit rating is the ability to pay back debt and within the required length of time. A repo, therefore, causes the credit rating to take a dip. A lender may even charge an extra fee to give you credit since they would be taking a risk with your soiled repayment record.

It is not just the repo in itself that causes damage. Your credit score will suffer because of the following too:

  • Towing fees to move your car, where applicable
  • Late fees plus their interest
  • Several months of missed payments
  • Car storage fees as the car sits in the lot
  • Any balance still owed after repo

Any other additional costs incurred lower the credit score even further. Seven years is too long to let it feature on your record. There are proper ways to address this situation. 

How to Get a Repo off Your Credit Card

1. Dispute It

According to the Fair Credit Reporting Act (FCRA), negative records must be true. Check for any inconsistencies in your report. It could be a wrong date or even a misspelled address. If there was an error, you can and should dispute it immediately. 

Make sure you explain why the item is incorrect when you dispute it. Send your complaint to all three bureaus (Equifax, Experian, and TransUnion) because they usually have the same records. You can do it online or via certified mail.

They are required to address the complaint within 30 days.  

2. Check with All Credit Bureaus

Once one credit reference bureau is reporting a repo, the higher likelihood is that the other two are as well. That’s because your lender shares the same information with each of them. Reach out to them with your details and confirm. 

If they are reporting inaccurate information, they will have to correct it or remove it. 

Where there are inaccuracies and any of the credit bureaus doesn’t respond to your request, reach out to the Federal Trade Commission (FTC).

3. Speak to the Lender

There is room to negotiate with your lender. You can work out a new arrangement that works for both parties. Maybe they can allow you to refinance the car or trade it in. Some may accept delayed payments or a different payment plan altogether. 

Be sure to speak to someone who has the authority to sign off on the new arrangement. You may need to be persistent in your asking before you get a favorable response but it will be worth the trouble. 

When you do get them to bend, make sure to have it in writing.

4. Hire a Credit Repair Professional

You can also ask credit repair professionals to do the heavy lifting for you. It will come at a monthly cost but they will handle all the disputes and negotiations for you and ensure errors are cleared.

Building Your Credit Report after Repo

Regularly going through your credit report will ensure you catch any incorrect information in good time. Sometimes this happens because of credit card fraud or even double listing of a credit account.

If the information is correct, you can start by slowly building trust with your lenders. Take out small loans you know you can repay and make sure you repay them on time. You may also consider a credit card with a low monthly limit. Start slow and build back slowly.

While a repo is a negative mark, it has less impact as it ages. Going forward, it is best to keep your credit report looking healthy. As the repo ages, lenders will look less into it and more into your current abilities and creditworthiness. 

Utilize your credit wisely, keep your total debt in check, maintain a good repayment history over an extended period, and diversify your credit lines a little. If you don’t need it, don’t get it yet. It will serve you better if you take it at the right time.

Final Words

A repo does not mark the end of your borrowing days. It may take about two years of a spotless repayment history for most lending institutions to consider extending credit your way but it soon ends.

In the event, you can’t wait that long, second-chance auto financing options exist. A second-chance car loan offers you credit after you’ve been denied by top-tier lenders. They know their clients have less-than-perfect histories and still accommodate them.

Whichever option you choose to take, be responsible for your credit. Remember, the goal isn’t just to own a car or how to get a repo off your credit card but to have a good credit rating to allow for better financial opportunities in the future.

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