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How to Remove a Repossession From Your Credit Report

When you stop making payments on an auto loan, the lender will take the vehicle back. In lending terms, this is called repossession.

A repossession could happen in two ways:

  1. You could surrender the vehicle voluntarily and retain some control over the process.
  2. The bank could send someone to reclaim the vehicle — often without notifying you in advance.

Either kind of repossession hurts your credit score. The negative item could crush your credit score if you have good credit otherwise.

What’s worse: You could still owe money on the car loan, even after the repossession, if the bank can’t pay off your balance by selling the car. This will make your bad credit even worse.

Can A Repossession Be Removed from Your Credit Report?

Yes, if you have a repossession in your credit history you have a few options to remove this negative item from your credit report.

You could try to remove the repossession yourself, or you could hire a professional credit repair company to help remove the negative mark.

Calling in the pros will cost several hundred dollars, at least. But a lot of consumers find the cost worthwhile because the credit repair company does all the legwork while you live your life.

But if you’d like to take the DIY credit repair approach, here’s how to go about it:

Steps To Remove a Repossession From Your Credit Report

1. Try to Negotiate New Payments

Your first option is to start negotiating with your original auto lender. This could be a bank, an online lender like Capital One, or the in-house finance company at the dealership.

You may be wondering how you could possibly negotiate a deal after the lender already repossessed the car? That is a very good question.

Your leverage is the fact that you owe money. If you can get the right person on the phone — someone with the authority to make policy decisions — you can propose a deal: Paying off the balance of the loan in exchange for getting the negative mark off your credit report.

If you do strike this kind of deal, get the details in writing before making the payment or payments.

Other than coming up with the cash, the most difficult part of this strategy is getting the right person on the phone. You’ll need some persistence.

And, this strategy assumes you could come up with the payment which I know isn’t a given. So if this won’t work for you, move on to the next step.

2. Dispute the Repossession on Your Credit Report

You could also get the negative item removed by disputing the repossession with the three major credit bureaus — Experian, TransUnion, and Equifax.

Data from these three bureaus feed your FICO score which lenders check before giving you a loan.

To dispute negative items such as a repossession, you’ll need to look over the entry closely, searching for any inaccuracies you can find.

Check these details for accuracy:

  • All dates
  • Balances
  • Payment terms
  • Account numbers
  • Anything else that’s inaccurate

If you find an inaccuracy, dispute the entry with the credit bureau that’s reporting inaccurate information. The bureau will have 30 days to verify its information is accurate.

If it’s inaccurate, the bureau will need to either correct the data or remove the entry in accordance with the Fair Credit Reporting Act.

Often, all three credit bureaus will have the same inaccuracy since they receive information from your lender.

Send dispute letters to the bureaus, including your account numbers, name, address, and Social Security number, at these addresses:

  • TransUnion Consumer Solutions
    P.O. Box 2000
    Chester, PA 19016-2000
  • Equifax Information Services LLC
    P.O. Box 740256
    Atlanta, GA 30374-0256
  • Experian Dispute Department
    P.O. Box 4500
    Allen, TX 75013

It is possible to remove a repossession using this method, but it’s not a guarantee. If you do find inaccuracies and one of the bureaus doesn’t respond to your letters, get in touch with the Federal Trade Commission.

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Have a Professional Remove the Repossession

If you don’t feel like writing letters, calling the lender and finding the right person, or coming up with the cash to settle a repossession, you could hire a professional credit repair company to help.

Credit repair companies won’t do anything you couldn’t do yourself, but they do this kind of work every day and have an expertise that goes above and beyond common knowledge.

If it’s possible to remove a repossession, a good credit repair company will get the job done.

I suggest you check out Credit Saint. They’ll take care of you. Check out their website.

You’ll pay a monthly fee for this kind of service, but having the repossession off your credit will pay for itself in lower interest rates and freedom from getting a co-signer every time you need to borrow money.

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Why is a Repo so Bad for Your Credit?

Of all the negative marks that can build up on your credit report — from late payments to missed payments to high loan balances — a repossession can have the biggest negative impact.

A repossession means you probably missed three or four car payments in a row and didn’t respond to phone calls and letters from your lender. It means your lender has lost money on your loan.

Plus, for you, the repossession isn’t the only negative mark that results from the ordeal. Your credit history will also show the monthly payments you missed leading up to the repossession.

If the lender hired a collection agency, the same debt may appear twice on your credit file, exacerbating the problem even more.

That’s why a repo could drop your FICO credit score by 100 points and possibly more.

How Long Will a Repossession Affect Your Credit?

Negative information stays on your credit report for seven years from the day it appears in your file. As the years pass, the negative impact on your credit score will lessen.

If you make on-time payments on your other credit cards and personal loans, your good payment history will start to compensate for the bad, softening the blow of the repo.

But the repossession will stick around, making any new credit application an adventure. You’ll feel the need to explain the negative item each time your credit gets pulled.

Is Voluntary Repossession Better for Your Credit?

Repossession has the same impact on your credit score even if you opt for a voluntary repossession. Either way, the lender had to reclaim the car and try to recoup its losses from your loan.

But voluntary repossession has a couple other benefits. You can preserve some dignity by taking control of the process, for example.

By making an appointment to return the vehicle, you’d be preventing someone from the bank from showing up at your place of work or at your home to take the car, leaving you stranded.

And, you could avoid a few additional late or missed payments from making their way onto your credit report.

If you see there’s no way to avoid repossession, you may as well surrender the car voluntarily. Usually, though, you can avoid a repo by communicating with the lender.

How to Avoid Repossession

Even if you’ve missed payments and been threatened with a repo, you could still avoid this outcome.

But you have to communicate with your lender before you’ve missed a long string of payments. Lenders don’t want to repossess your vehicle. They almost always lose money when they have to cancel a loan and reclaim the car.

Because of this, a lender will usually work with you to avoid repossession. You could refinance the car for lower payments or maybe even skip a payment, with permission, to help you catch up and start making timely payments again.

The key is to get ahead of the curve. Once the bank’s designee has shown up at your door with plans to drive off in your car, you’re almost out of options.

A Repossession Can be Removed, but It’s Not Easy

If you have a repossession in your credit history and it’s reported accurately and you can’t afford to pay off the bad debt, you’ll have a hard time removing the negative mark from your credit report.

If anyone can help, Credit Saint or Lexington Law — the two professional credit repair companies I mentioned above — can find a way.

But if the credit bureaus report the repo inaccurately, or if you can afford to negotiate a settlement with the original lender, you still have some leverage you can use to remove the derogatory mark. You’ll still need some persistence, but the law is on your side.

Before you start disputing the repo, look over the Fair Credit Reporting Act and the Fair Debt Collections Practices Act — both of which lay out your consumer rights.

The Consumer Financial Protection Bureau also has resources you can use as you make your case to the credit bureaus.

Later, once you have the issue resolved, you’ll once again be able to borrow at competitive interest rates and retain the buying power you need to build a better financial future.


  1. I have a couple questions. My ex co-signed for my car in the mid to late 1990’s. I think I voluntarily surrendered it but it may have been reposed. If he was the co-signer on the loan why was it put on my credit report not his? He also was an owner of a bakery and put me on his sears card as an authorized user. That debt is also on my credi report. And lastly Mr. Fabulous purchased a new electric oven for the bakery and used my information for the electric bill. That total is about $1800.00 I believe. Also on my credit report. What , if any thing , can I do to rectify this issue? I live in nj and 98% of my debt is well over 7-10 years old or older Medical bills, several utility bills, of course the lovely aforementioned debt my ex so generously left. I’m tryin to clean my act uup n be a good example for daughters. Absolutely would hate for them to live like this. Please someone anyone HELP

  2. Question: I was wondering could I dispute a paid mobile-home repossession? Would it be better to contact the company who had a hand in it and ask them to change the status?

  3. My sister co signed for my mom. My mom missed a few payments due to limited income from SSI. Car was repossessed but we got it back in 24 hrs and are current on all payments and are close to paying it off. Does this help at all my sisters credit or is it still crushed?

  4. I have a question.. I do have a repossession on my credit report what is the address for me to send my paper work in that I can try to get this off of my report. And what paperwork do I need to put in the letter for it to be simple.

  5. I bought a Mitsubishi and financed with Mitsubishi Motor Credit. The car was a lemon. The dealer offered to void out the loan if I brought back the car. I did that and Mitsubishi Motor Credit refused to honor the dealer or state lemon law. Every 6 months they add the “repo” back onto my credit. All the paperwork from the dealer confirming the car was a lemon was damaged in a house flood. Is there anything I can do since Mitsubishi Motor Credit is drilling my credit for $15000 on a car that only cost $18000 new and auctioned for $14000

  6. So we voluntarily surrendered our car and didn’t miss a single payment… car was a lemon but didn’t fall under lemon law. We were then sued by a company that bought the loan from the finance agency. Now we are paying the difference of the car that wasn’t made when it went to auction. Once it’s paid off with the lawsuit can I get the repo removed from my credit?

    1. This has happened to me…
      what was the end result? Did everything work out? I need some advice. Thanks

  7. I co-signed a car loan for my son.. He didn’t make the payments and the car was subsequently repossessed. However, the lending institution never contacted me, by letter or by phone that the car was being repossessed. They never asked for money or anything, but they did report me to the three credit bureau’s and destroyed my credit… I want to know what I can do about it and how to get this removed from my credit report

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