Repossessions happen when you fail to meet payments on an item. They can appear on your credit record and negatively impact your credit score.
However, you can challenge the repossession order on your credit record if you think it's wrong. We will show you how to dispute a repossession and ask for it to be removed.
Disputing a repossession
If you think that a repossession on your credit report is wrong, you can ask the credit bureau to remove it.
When you request a removal, the credit bureaus have 30 days in which to act. If they don’t do anything within this timeframe, you can take the matter to Federal Trade Commission.
To dispute a repossession you need to provide the credit bureau with:
● Proof of your identity
● Paperwork/documentation that shows that the repossession was a mistake
Send everything to the credit bureau by registered mail.
Check information with all credit bureaus
You may have resolved the repossession issue with one bureau. However, other bureaus may be unaware of the mistake and it still appears on credit reports issued by them. ]
It is free to ask for your credit report, so get all the bureaus (Equifax, Experian, and TransUnion) to send you a copy.
You may have to send copies of your supporting documentation to each agency.
Talk with the lender
When a lender repossesses an item, they can lose out. That is because the item has devalued and if they sell it, they won’t recuperate the money owed. By asking the lender about the possibility of a new payment plan, they can be willing to negotiate. That's a win-win situation.
You avoid having a negative item appear on your credit record and the lender still gets the money owed.
Ensure that you get the revised payment agreement in writing.
Contact a credit repair agency
Credit repair agencies are experts at identifying negative items on your credit report. They then dispute the items on your behalf.
Of course, you can do all this by yourself. Yet, you may find the whole process overwhelming. If so, reach out to a credit repair organization.
How do repossessions affect my credit score?
There is no set range in which your credit score drops if you have a repossession on your credit report. The level that your score is affected varies depending on the severity of the repossession.
However, a repossession is a red flag that lets potential lenders know that you may not be able to make repayments.
Repairing your credit
If your credit score has been affected by a repossession, you can still fix it.
Making regular payments on a new credit line can help. Also, look at having a credit agreement in which you are a co-signer.
Another option is to simply wait until the repossession notice drops off your report. This can take seven years.
If you think that a repossession on your credit report is a mistake, you can challenge it. Contact the credit bureau and send in documentation proving your case.
Renegotiating payment terms with your lender could lead to them avoiding repossession. That prevents a negative item from appearing on your report.
You can improve your credit score by making payments on time with any new credit. Otherwise, you need to wait seven years for the repossession item to be removed from your record.