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Falling behind on your car payments could put you at risk of repossession. And the road back to financial recovery can be tricky to navigate. But there are ways to potentially remove a repo from your credit report or just make up those lost points.
Repossession can wreak havoc on your credit report in a few different ways:
The impact a repossession has on your credit score varies depending on your individual credit history and the scoring model used. But typically, a 100-point drop isn’t uncommon after an involuntary vehicle repossession.
A repossession stays on your credit report for up to seven years from the original missed payment date. But the negative impact won’t last forever — especially if you take active steps to repair your credit.
If you don’t want to wait seven years for a repossession to fall off your report, it’s possible to have it removed — but nothing is guaranteed.
A credit repair agency may be able to help you dispute any fraudulent or inaccurate credit report items. The credit bureau will investigate your claim and contact your lender. If your lender fails to verify that the repossession was valid or doesn’t respond to the dispute within 30 days, then the repossession is removed from your report.
You can also try contacting your lender to renegotiate. Your lender may agree to remove the repossession after you’ve paid off your outstanding debt in full, and it certainly doesn’t hurt to ask.
Rev up your credit score and recover from a repossession with the following tips:
Having your car repossessed can hurt your credit a few different ways, but it’s possible to recover. Take the wheel and steer your finances by communicating with your lender early and often.
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