How Long Does A Car Repo Stay On Your Credit?

With the rising car and home prices, a car repo is a genuine possibility for many. Whether it's a pending or immediate reality, you might wonder how long it will stay on your credit report and whether there are ways to prevent the seemingly inevitable situation. 

If you can relate to the above, you've found the right place. The following sections detail how long car repos stay on your report, how to prevent them, and your options following a repossession.

How Long Does A Car Repo Stay On Your Credit Report?

When your car is repossessed, records of it are kept and reported to the three major reporting bureaus. These are Experian, TransUnion, and Equifax. Ultimately, these three bureaus will record the repossession on your credit report. 

A car repo stays on your credit report for seven years in the United States of America. These seven years begin with the first missed debt payment that caused the repossession. And as we're sure you know, a repo is a less-than-positive mark. 

Your credit score will drop substantially once the repossession has landed on your report. However, it's tricky to predict how much a repo will affect your credit due to the numerous factors influencing your overall score. Although, it could be considerable to drop you from an excellent or perfect score to a good or fair rating.

How To Prevent A Car Repossession

Ideally, you don't want to experience a repossession; it isn't just bad for your credit score and a general nuisance. After all, your vehicle may be your primary method of transportation!

That said, paying the lender is the only foolproof way to prevent a repo proactively. If you can't afford to fund the whole outstanding amount, many lenders will negotiate a payment strategy before resorting to a repossession. Why? Because a repo can cost lenders more than letting you repay the loan over time. Be proactive and upfront for best results — do not ignore missed or late payment notices.

How To Rebuild Your Credit Score After Auto Repossession

If you haven't been able to prevent a repossession, your credit will take a hit (as explained above). However, there are ways to rebuild your score and return to financial health. It may take a while, but you can start immediately. Here are a few tips:

• If you're behind on other accounts, catch up on these payments. This is a significant first step toward rehabilitating your credit rating.
• If you have other outstanding debts, pay these off, too. This includes balances that might be left on your repossessed account once the lender has sold your vehicle. Accounts with past-due payment histories are still deemed harmful, but lenders may be more willing to provide credit if you've since made good on the balance.
• Go forward and pay on time. Your recent payment history matters most. As you leave your repossession behind, ensure any new payments are always made up.
• Become an authorized user on somebody else's credit card. Remember that this can work against you if the account owner overspends or fails to make timely payments.
• Find a dependable credit counseling agency. The US Department of Justice offers a state-by-state list of accredited agencies that can work with you to rebuild your score.

A Good Credit Report Isn't The Be-All And End-All

While you should always work toward good credit, a squeaky-clean report isn't the be-all and end-all in finance. Despite many lenders denying loan applications due to poor scores, you can access alternative financing during an emergency, such as loans provided by us at Missouri Title Loans, Inc.

If you own a vehicle outright, you can use it to obtain a title loan. You can get an installment loan if you don't own a car outright. The former allows you to borrow as much as $15,000 (we put a lien on your vehicle to secure the loan), while the latter lets you borrow up to $1,500.

Unlike traditional loans, you don't need a stellar credit score to gain approval for our loans. You only need a few documents, and we'll help you through our straightforward process. We require a lien-free title, ID, and vehicle for a title loan, as well as your ID, checking account statement, and proof of income for an installment loan.

Get A Loan from Missouri Title Loans, Inc. Right Now!

A car repo stays on your credit report for seven years from the date of the first missed payment. But you can still access emergency cash without a glowing credit report from us at Missouri Title Loans, Inc. Complete our online form, and we'll call you to discuss the process!

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.