How To Remove Repossession From Credit Report?

When you talk about your credit scores and the health of your credit profile, you might want to watch the repossessions. If anything is more derogatory for a consumer credit profile, repossessions are hands down the worst of all. 

They hurt your credit scoring like anything and make it hard for you to qualify for any new finances from creditors or card issuers in the future. However, all the repossessions you may see on your credit profile are invalid. And then there are these true repossessions with errors damaging your credit scores unfairly. 

For someone unaware of credit scores or doesn’t use credit cards often, you might want to know how important these scores are to maintain a healthy credit report and remove repossession from your credit report. A healthy credit report can get you fair qualifications and terms & conditions with future loans or credit cards because it is not as easy to remove repossession from a credit report as it is to get on it. 

What Is A Credit Score?

A credit score is a number that is looked at by the lenders, creditors, credit card issuers, or financial institutes to determine your ability or inability to pay back the debt you applied for. These numbers are based on many factors contributing to a good or poor credit report. 

The factors that may affect your credit report are on-time payment, how many credit cards you have, how many credit lines you use, your credit card history, and more. A good credit score starts from 750 and above. A poor credit score is anything from 650 and below. Meanwhile, a fair score is anything from 651 to 749. 

Defining Repossession

The term repossession is used to explain the retaking of the possession of something if a borrower has failed to repay on time or has fallen behind the repayments in the term period. The creditor can either repossess the security or get help from a third-party service to get the things repossessed. 

It happens with high-priced items like a car or a home resold by the crediting company while you own it. There are only two possibilities because you end up with a repossession; either you have missed paying a couple of payments or failed to pay your payments over a termed period.

For example, a car repossession usually happens when you fall behind on your monthly auto loan payments. If you buy a car on an auto loan through a bank, the car technically belongs to the bank until you are done with the payment in full after the term period. But in case you cannot pay back on time or fall behind your payment. The bank can take it back from you. 

The repossessions are irritating, but they severely affect your credit score profile. The impact can drastically lower your credit score, leaving a negative footprint on your consumer credit profile. 

In the majority of the states in the US, the creditors of the loan do not even send notification or mail to warn you about the defaulted payment, and they get the item back once your loan gets marked. The creditors then put the property or the car on auction to sell the vehicle to recover the amount of money you took as a loan from them. 

To further understand, you need to understand the types of repossession. 

What Are The Types Of Repossession

So there are two forms of repossession that consumers face when they fail to repay their debts on time.

Voluntary Repossession	Involuntary Repossession
If a borrower intentionally chooses to hand over the assets they get a loan for to their creditor to resolve the debt issues, it is called voluntary repossession.	If a creditor asks for repossession of defaulted assets, where the borrower doesn’t comply with intentionally giving up the assets is called involuntary repossession.
The processes of involuntary repossession are comparatively less complicated than the other.	The processes of involuntary repossession are very complicated.

If you find a repossession you believe is incorrect or doesn’t show the accurate information on your credit report, below are mentioned a few ways that will help you remove it.

How To Remove Repossession From Your Credit Report

The FCRA –Fair Credit Reporting Act needs accurate and correct information for any negative derogatory on your credit report. 

Hence, if you see any incorrect item reported from repossession on your credit report, you can file a dispute to remove repossession records completely from your credit report. It will put the burden of providing proof on the reporting credit bureaus’ shoulders.

You must file a dispute with your credit reporting bureaus to get a repossession removed from your credit report. Your creditor’s responsibility is to prove the validity of the reported repossession on the credit report from the hereafter. 

If your creditor fails to bring valid proof and verify the repossession within 30 days, the credit reporting bureaus are bound to remove the repossession from the credit report. 

For filing a dispute against the repossession, you will need to get a credit report first. You can get free access to your credit reports from your respective credit reporting bureaus –Experian, TransUnion, and Equifax; or you can go to AnnualCreditReport.com to get free credit reports of all the major credit bureaus with ease.

After getting your credit reports, you need to see if the error or inaccurate information is reported on all three 3 credit reports and what other errors or inaccuracies are reported there to fix them. If yes, then you can file the dispute with the credit reporting bureaus and get the error reported.

Now the question is, how do you do it? The answer is simple: there are more than a good number of ways to file your dispute, including mail, phone, or online. However, the best way to do this is to send a letter to all three credit reporting bureaus.

You may have the following question in mind as you read this blog; 

– How long will it take to remove repossession?

For all the negative remarks on credit reports, FCRA -The Fair Credit Reporting Act has set term limits for how long can each stay on your credit report. In case of repossessions, they can last for up to 7 years once they are past 180 days of their due date.

– Is there any way to remove repossession other than filing a dispute?

There is another way to settle and remove repossession other than filing a dispute with the credit reporting bureaus. You can get it settled earlier with the creditors, only if they agree. For creditors, reporting credits is a choice. They report to credit reporting bureaus because it helps them recover the debts as soon as possible. 

– Will paying my repossession improve my credit score?

It might sound good to you, but there is no guarantee that you can improve your credit score by getting it removed after paying the debt off on your repossession. It may or may not improve your credit score. The score will get affected when you know what scoring model your creditor uses because the score depends more on the model of scoring. 

Conclusion

Repossession might become a nightmare for you if it gets reported inaccurately. It will last for 7 years and hurt your credit score very badly. Filing a dispute is the safest way out because trying to settle with the creditor often complicates things. So before your credit score falls in the spectrum of poor credit scores, try to remove repossession from your credit score.