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Repo Regrets: How Long Will It Stay on Your Credit Score?

  • Auto Refinance
  • Xavier Sabastian
  • 8 minutes

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Are you curious how long a repo can haunt your credit score like a ghost? Well, sit tight, and let’s delve into this topic.

A repossession of your car can stay on your credit report for up to seven years. It will lower your credit score. 

If your report has a mistake, your score could drop even more. After having your car taken away, you can fix your credit by disputing mistakes on your credit report and taking other steps. We will tell you what you can do to keep a car repossession from hurting your credit score too much and what you can do to improve your credit score if your car has already been taken away.

For seven years, repossessions will show up on your credit report. You'll also have marks on your record for late-payments and the loan you didn't repay. Both of these things will stay there for seven years.

Understanding Credit Score Repo

First off, what’s a repo? No, we’re not talking about “Repo! The Genetic Opera,” although that’s a pretty wild musical. We’re talking about when you can’t keep up with payments on something you’ve bought, and the lender takes it back.

Well, imagine a scenario where you’ve borrowed money from a lender and failed to repay it on time. It’s just like a scene from “The Godfather.” Where the lender sends their goons to repossess your car, or “The Fast and the Furious,” where your car gets snatched away by the repo man!

A repossessed car won't help your credit score, which probably doesn't surprise you. But did you know that it can lower your score by at least 100 points? A repossessed car can stay on your credit report for up to seven years, but that's not the only bad thing. Your credit score was hurt by the car loan payments you didn't make before your car was taken away and by any deficiency balance you may still owe.

This is called credit score repossession, which can lead to a lot of trouble. Your credit score takes a hit, like when “The Joker” wallops Batman. This negative mark can haunt you for up to seven years, making it almost impossible to get a loan in the future, just like how in “Cast Away,” Tom Hanks struggles to get back to civilization after being stranded on an island for years.

So, if you don’t want to end up like “The Hangover” gang, who have no idea how they lost their car, making your loan payments on time is crucial. This way, you can avoid the risk of repossession and the resulting damage to your credit score. Remember, “The Lion King,” said, “The past can hurt, but the way I see it, you can either run from it or learn from it.” Learn from your mistakes, pay your loans on time, and protect your credit score!

Are you tired of paying an arm and a leg for your car loan? Well, you’re in luck! Refinancing your car through Way.com can save you at least $1850 annually!

Behind the Scenes: How Repo Can Impact Your Credit Score

Let’s talk about the effects of a repo on your credit score. It’s like when Buzz Lightyear fell with style in “Toy Story” – it’s going down, down, down, and it can take a while to recover. A repo can stay on your credit report for up to seven years, just like the curse on Captain Barbossa’s crew in “Pirates of the Caribbean.”

That’s a long time to be haunted by a wrong financial decision. It’s like being stuck in the Overlook Hotel from “The Shining” with no way out. So, it’s essential to avoid a repo by communicating with your lender and finding a solution that works for both parties.

A repossessed car won’t help your credit score, which probably doesn’t surprise you. But did you know that it can lower your score by at least 100 points? A repossessed car can stay on your credit report for up to seven years, but that’s not the only bad thing. Your credit score was hurt by the car loan payments you didn’t make before your car was taken away and by any deficiency balance you may still owe. But don’t worry. You can fix your score and credit history. First, you need to know what a deficit balance is.

The amount you still owe on your car loan after your car has been taken away is called the “deficiency balance.” Even if your car was sold to pay off the debt, the money from the sale might not have been enough to cover the extra fees, fines, cost of a repossession, and interest. A car lender can take you to court and ask for a judgment against you for the difference between what you owe and what you owe.

What is Voluntary Repossession?

A “voluntary repossession” option can avoid these extra costs. If you give your car to the person who holds the loan before a forced repossession, they can’t charge you specific fees for the repossession. You can work out a payment plan with the bank if you’ve shown that you’ve tried to pay off your loan balance reasonably.

If your car is taken away and a delinquency judgment is made, it will appear in your credit report history under “public records.” The judgment will be used to calculate your credit score; if it is terrible, it will hurt your score and make it harder for you to get credit in the future.

How Lenders Analyze Your Credit Reports

A lender who looks at your credit report won’t know what you have to say. They won’t know that your wallet was stolen, that your hours were cut at work, or that you had to move to get out of a bad situation. They don’t know anything about you or your financial situation. All they see is a number that tells them how risky it is to lend you money. They will see a history of late and missed payments, the added cost and trouble of repossession, and a court process for the lender. A lender is accountable to others, often insurance companies and shareholders, and they cannot take that risk. But you can do things after the repossession, in the next part of your story, to improve your situation and become a “safe bet” over time.

However, if a repo does happen, it’s not the end of the world. You can still work on repairing your credit, just like Rocky Balboa trained to become a champion in “Rocky.” One step you can take is to make sure all your other payments are on time. Pay down any other debts you may have.

How to Remove Repo from your Credit Score Like a Pro

Imagine you’re in a movie where you have a car that was taken back by the lender. This is because you couldn’t pay your loan. But you can deal with the lender and settle the debt for less money. This can help you get the repossession off your credit report. However, most lenders will only accept this kind of deal if you immediately have a lot of money. It’s like in “Pirates of the Caribbean,” where Jack Sparrow has to give something valuable to escape trouble.

If you can’t settle your debt, check your credit report to ensure everything is correct. You can request a free copy of your credit report once a year from the three major credit bureaus – Experian, TransUnion, and Equifax. You can also get it once a week temporarily due to the pandemic. Check to ensure there are no mistakes in your payment history or personal information. Like how “Sherlock Holmes” pays attention to every detail to solve a mystery.

Sometimes, the reporting agencies make mistakes by mixing up files or missing information. These mistakes can affect your credit score, which makes it harder for you to get a loan in the future. If you need corrections, inform the credit bureaus by disputing them online. It’s like when “Iron Man” uses technology to solve a problem. You can also inform your lenders about the mistakes in writing to have proof of the investigation.

Ultimately, taking care of your credit report is essential just like “The Karate Kid” takes care of his training. It will help you get better loan terms in the future and avoid any issues that may arise.

TL;DR

For seven years, repossessions will show up on your credit report. You’ll also have marks on your record for late-payments and the loan you didn’t repay. Both of these things will stay there for seven years.

Every lender is different, so having a repossession on your credit report means you can get a loan. Lenders look at your whole credit history, so you’re more likely to get a loan if:

  • You’ve worked hard over the last four years to raise your credit score.
  • You get a steady paycheck.
  • You have paid your other bills on time for the past four years.

Bottomline

A repo can stay on your credit report for up to seven years. So it’s best to avoid it if possible. But if it does happen, don’t lose hope. Keep working to improve your credit score like a superhero on a mission to save the world. And who knows, maybe you’ll end up like “The Karate Kid” and come out on top.

You can finally upgrade from the kiddie pool to the adult-sized pool. With Way.com, the process is as easy as 1-2-3. So why wait? Refinance your car loan today and save more for the essential things in life – like pizza and movie tickets.

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