Even if you redeem your automobile, a repossession lowers your credit score.
If you satisfy certain conditions, your lender may restore a repossessed car to you, which is known as redemption. Most creditors want full payment before returning your automobile, but others may offer you another opportunity if you catch up on your payments and cover all repossession-related costs. Even if you get the automobile back, the repossession remains on your Experian, Equifax, and TransUnion credit reports and decreases your credit score unless you have it erased.
All papers relating to your repossession and redemption should be printed three times. To have the repossession erased from your records and its impact on your credit score deleted, you must uncover anomalies between your papers and credit reports. For each of the three credit bureaus, you’ll need one copy of your records.
AnnualCreditReport.com can provide you with your three credit reports. Experian, Equifax, and TransUnion collaborate on the site and, as required by federal law, send out free credit reports once a year upon request. Because the bureaus are unconnected and gather their data separately, the information on your repossession will show on all three reports, but the details may differ significantly.
Compare your three credit reports’ repossession entries to your records. You have the legal right to contest all inaccuracies on your credit reports, even minor data errors, under federal law. According to Carreon and Associates, repossession agencies frequently make mistakes when calculating or reporting towing rates, storage fees, and other expenses. To contest the repossession item on your records, you might use anything from a misreported sum to a false date.
Write to each credit bureau, pointing out the repossession data mistakes and demanding that the whole listing be removed. Attach a copy of the papers to demonstrate that the error is genuine. Unless the entity that provided the data shows that it is correct, federal law mandates that erroneous credit report entries be erased. Use certified mail with the receipt requested and looked up the current credit bureau addresses on their websites so you know when your letters will arrive.
When the revised copies of your credit reports come, double-check them. The credit bureaus have 30 days to resolve your dispute under the Fair Credit Reporting Act, so you should receive the results and new report copies before that time runs out. As soon as the repossession is removed from your credit record reports, it has no effect on your credit score.