Don’t beat yourself up too badly if you have a repossession on your credit report. You are not alone. Having a repo does make your credit score plummet, which makes it difficult for you to get future loans. If you do nothing, the repossession will come off your credit report in seven years. If you don’t want to wait that long, you can take some steps to try to get the repossession removed.
Know the Law
Some states have particular laws on the ways repossession can occur. Research the laws of your state. If the repossession was not conducted according to the letter of the law, you might have a case to have it overturned. For example, some states require that your creditor send you a written notice called a "Right to Cure Notice" telling you what you owe. If the creditor does not send this out or if the creditor sends it out too early, the creditor has not complied with the law. Other states have a “breach of peace” law that does not allow a repossession to take place that involves yelling, swearing or taking the car while you are protesting. If the creditor violates a state law, you can then dispute the repossession with the credit reporting agencies.
Disputing the Repossession
To dispute a repossession on your credit report, send a letter to all three credit reporting agencies: TransUnion, Equifax and Experian. Explain the reason you are disputing the repossession. For an illegal repossession, explain which state law was violated. Include a copy of the state law with your letter. Ask that the repossession be removed from your credit report. You can also include a copy of your credit report with the illegal repossession circled. Send the letter by certified mail, and request a receipt of the letter so that you can document when the credit reporting agency received it. The credit reporting agency has 30 days to investigate your dispute. If you lose the dispute, you can still ask the credit reporting agency to include in your report that you did file a dispute about the repossession. Also, send a letter to your creditor that you disputed the repossession.
Deal With it Early
Right after your car was repossessed, you still have some wiggle room to try to negotiate a deal with your creditor. If you can gather the money owed to pay off the car, your creditor might agree to take it and sell you back the car. Or, if you don’t have the money, you can try to renegotiate your loan to payments that you can afford. This is called “reinstating” your loan. Before you agree to any deal, ask the creditor to remove the negative report of repossession it made to the credit bureau. Not all creditors will agree to do this, but it is worth a shot to try. If the lender refuses to contact the credit reporting agency on your behalf, you can still take the deal you made to get your car back. Having a paid-off charge on your credit report or continuing to make payments on a renegotiated deal is better than not paying the amount back at all. Also, the more time that goes by, especially if you continually add positive data to your credit report, the repossession will comprise less and less of your score.
If you are having a difficult time making payments on your vehicle, be upfront with your creditor right away. You might be able to stop the repossession from occurring. Many creditors would rather work out a deal with you than repossess your car. One deal might be to give you some extra time before the payment is due. Another deal might be to reduce the monthly payments. If the creditor agrees to a new deal, get it in writing. If the creditor refuses to negotiate a new deal, you have the option of a voluntary repossession. This still shows up as a repossession on your credit report, but you will not need to pay the fees associated with an involuntary repossession such as paying the recovery agent’s or attorney’s fees.
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