How Long Repo Stays on your Credit Report
What is Repo?
Repo is simply the short form of repossession, which describes the situation when a lender takes back whatever item a borrower purchased on credit. Most lenders repossess items purchased on credit whenever lenders default on repaying the credit within the duration agreed upon. You can secure a loan to purchase a car, a house, furniture, or even electronic items. Any moment you default on paying the loan, your creditor has the right to take back the item you bought using the money they lent you. This is what we call repossession or repo.
What Causes Repo on your Credit Report?
You should expect a repo on your credit report whenever you default on paying a loan you took to purchase a car or any other property. Once the repo is activated on your credit report your lender will take back and sell your property to recover the money you owe them. For example, if you have defaulted in paying your creditor $10000 you borrowed to purchase a car, the lender will repossess and sell that car to recover the $10000 you have failed to pay them within the agreed period.
How Repo Works on your Credit Report
When repo is recorded on your credit account it means that you have failed to repay your loan at some point in your loan repayment period. While repayment history determines how impressive your credit history will be, a repo on your credit report means you have a negative credit history and this implies that your chances of securing a loan have dropped. A repo on your credit report also implies that creditors consider you a high-risk client when it comes to advancing credit facilities to you. Such a client is likely to be denied loans by various lenders and if give, the loan is often attached with high interests rates.
How Long Repo can stay on Your Credit Report
You can voluntarily deliver your property to your lender if you have defaulted on paying the loan you took to purchase that property. You can also watch helplessly as your lender repossess the property you purchased with the money you borrowed. Either way, there will be a repo effect on your credit report and, this repo will last up to seven years in the sense that creditors will feature the repo on your credit reports for seven years. If you owe your lenders some money even after they have repossessed your property then your lender has the right to invite a collection firm to collect their money from you.
Repo will stay on your credit report if your property has been repossessed and sold yet the whole amount you borrowed has not been recovered. Whether or not your loan is paid in full after the repossession of your property, the repo feature on your credit card will remain for seven years, unless you are impatient enough to try deleting it from your credit history. However, if you can improve your credit score then the strength of the repo on your credit report will gradually weaken as years go by.
Can I Remove Repo from my Credit Report?
Whenever there is a repo on your credit report you are likely to suffer for a long time when it comes to recording negativity in your credit scores. This is why many will try to remove repo from their credit report whenever lenders seize property from them. It may be futile to try removing repo from a credit report because the standard duration for repo to leave your credit report is seven years, and that will only occur if you have not defaulted on anything after your lender repossessed the property you bought with the money they lent you.
However, it is always better to try removing it because trying something is better than doing nothing. If you wish to know how you can do away with the repo on your credit report then read consider the following simple steps.
1. Review the Repo on your Credit Report
You need to obtain a copy of your latest credit report to assess the current repo on your credit report. You have to review your credit report keenly because some repo on your credit report may be the result of errors. Ensure the repo on your credit report is genuine and you can easily recognize it.
2. Request the Credit Bureau to Delete the Repo on your Credit Report
If you are certain that the repo on your credit report is a result of typing or any other error you need to file a dispute letter with a credit bureau requesting them to erase the repo on your credit report. The credit bureau will review your credit report and explain to you whether or not the repo on your credit card is accurate.
3. Wait for the Credit Bureau to Communicate about the Repo on your Credit Report
Your credit bureau will respond to your dispute letter within 30 days. They will inform you whether the repo on your credit report is valid or invalid. If they find out that the repo on your credit report is genuine they will not remove it but if they discover it is illegitimate they will proceed to eject the repo from your credit report.
Additional Information on Repo on your Credit Account
You must contact your creditor in writing and asked them to assure you with proof that the repo on your credit report is genuine. If the creditor can prove that the repo on your credit account is genuine then all you can do is to wait. However, if your creditor cannot ascertain the truthfulness of the repo on your credit report then they can proceed to remove it. You also need to engage credit repair firms because they can provide you with reasonable details concerning the removal of the repo on your credit report.
Frequently Asked Questions
What is a repo on a credit report?
A repo is simply the short form of repossession, which describes the situation when a lender takes back whatever item a borrower purchased on credit.
How long does a repo on my credit account last?
A repo on your credit account can last up to seven years