Repossessions are the most challenging drawbacks that people have on their credit reports, and they are the toughest to remove. Many people have their credit score hurt by repossessions because these indicate late payment, which led to a seizure of assets.
If you have an asset repossession listed on your credit report, credit repair can help you remove the listing. Here is everything you need to know about credit restoration for repossessions.
What Is Credit Restoration?
Credit restoration can help delete your poor credit history from the past. This process will significantly improve your credit score and give you the right to dispute any information from your report.
Then your credit reporting agencies will have approximately 30 days to verify or investigate the removal.
How Does Credit Restoration Work?
Your credit’s accuracy is checked in reports. You are entitled to get a free credit report every year by law. When you have this in hand, check to see the late payments on it. Any incomplete or inaccurate information can be disputed.
There may also be some fraudulent transactions on your report. This happens frequently, but many people never find out their full legal rights. With credit restoration, you have a fighting chance to improve and build back your credit score.
Is Credit Restoration Worth It?
Reputable credit repair companies can help you remove any inaccurate information from your report. This protects you from a damaged credit score that is holding you back from getting a car loan or a mortgage. Your overall credit score is calculated based on what is on your credit report. At times, this information is incorrect.
This happens if your creditor reports erroneous information to the credit bureau or if you are a victim of identity theft. Even if your report is correct, a professional company can contest to change it. Otherwise, a repossession may stay on your report for several years, impeding your quality of life.
How to Remove Repossessions
Repossessions can be taken out of your credit report if they are unfair. However, there are a few ways to remove one, so it does not stay on your report for long. You can start by negotiating with your lender because they lose money during repossessions.
If you set up a new payment plan, they might be willing to accept it. Having you pay off your debt is much cheaper and convenient for them, and they can reduce your costs to make this happen.
Alternatively, you can also file a dispute. Go through your reports to see if anything is reported by mistake about your repossession. This will be disputed with credit bureaus, who will investigate the claim.
Then they will reach out to your lender to prove whether the debt is fair or not. If the lender cannot prove this in time, then the credit bureau can get rid of the repossession from your credit report.
What You Need to Raise a Dispute
If you have passed your negotiation window with the lender or feel that they are not cooperating, you will need to file a credit dispute to prove that the repossession might be outdated or fraudulent.
The first thing to do is obtain and check your credit report, which you get for free each year from Annual Credit Report. Then note any mistakes you see in that report. These can be the wrong dates or any amounts you disagree with.
Collect any evidence that can support your claims about why the transactions are wrong. You will also need to provide proof of identity. Then send the report errors to the credit bureau.
They will have 30 days to conduct the investigation and send you the results. If the lender cannot defend against your evidence, the bureau will remove the negative record from your credit report.
How Repossessions Affect Your Credit Score
Repossessions happen when you have bought an asset on credit and have missed a few payments. If your lender does not think you will pay on time, they can repossess the asset.
This is common with car loans, furniture, or property. If you have a repossession on your report, your score will plummet depending on how bad the late payments are.
A repossession on your credit report will also be visible to future lenders who will not want to do business with you without upfront payments. You will gain an unfavorable reputation where people cannot trust you to pay them back, which ruins your chances of getting credit applications approved.
How to Prevent a Repossession
If you cannot make any payments on time, contact your lender, and get on their good side in advance. Let them know that you are going through some problems and see if they can be a little more patient.
Discuss a new payment plan if they are flexible. Some lenders may let you skip payments for a couple of months if they know that you will bounce back on your feet and make it up to them. Communication is essential to avoid getting penalized.
However, there is always a risk where a lender may not care to communicate and will move forward with repossessing your asset if they do not trust your ability to make future payments on time.
Improving Your Credit After Repossession
If you get approved for loans or new lines of credit after the repossession, it takes time to build your credit again. Your credit score will go up as the repossession gets taken off the report, but you will need to open new accounts and make payments on time.
This can be a challenging process, so you may need to get in touch with a professional firm to develop a strategy for you to bounce back your credit score in the shortest timeframe.
Starting the Credit Repair Process
Most people struggle with negative items like repossessions on their credit reports. Your credit score makes or breaks your ability to rent an apartment in the future, let alone buy another property on credit.
Our team of experts can challenge these unfair and incorrect repossessions that stay on your records for years.
Get in touch with one of our Elevation Outsourcing credit repair consultants today, and we can kickstart the process to get you back on track with a decent credit score in no time.