How to Get a Repo Off Your Credit

Repossession can feel like the end of the road for your credit score.

In the USA, nearly 2.2 million Americans experience repossession every year. 

Whether it’s due to a missed car payment or unexpected financial challenges, many people face this issue.

But the good news? 

With the right strategy, you can remove it and bounce back stronger.

In this guide, I’m going to show you how to get a repo off your credit step-by-step. 

Let’s jump right in

What Is Repossession?

Before we talk about the steps, let’s make sure we’re on the same page about what repossession actually means.

Repossession happens when you fail to make payments on something you bought with a loan, like a car. 

When you can’t keep up with your payments, the lender takes the car back. 

This can feel like a huge loss.

But it’s more than just losing your vehicle. 

The real kicker is how repossession impacts your credit.

A repossession is a major negative mark on your credit report. And it can lower your score by a lot.

In fact, a repo can stay on your credit report for up to seven years, making it tough to get approved for new credit or loans during that time.

But the important thing to remember is this: just because you have a repo on your credit.

It doesn’t mean you’re stuck with it forever.

Why Repossession Hurts Your Credit

So, why does repossession hurt your credit score so much?

I saw cases where a client had a 100 drop credit score in just a month.

It boils down to trust. 

When you borrow money to buy something—like a car.

Your lender trusts you to pay it back. 

If you stop making payments, that trust is broken. 

When lenders see a repossession on your credit report, they assume you’re a high-risk borrower. 

This makes it harder to get approved for new loans, credit cards, or even rental agreements.

To make things worse, repossessions don’t just happen overnight.

Before your lender takes back the car, you’ve probably already missed several payments. 

Each of those missed payments is a hit to your credit score. 

So, by the time the repo happens, your score has already taken a dive.

How Does Repossession Work? (Timeline and What to Expect)

Let me walk you through what typically happens during a repossession. 

Understanding the timeline can help you see where you might still have time to act.

Missed Payments (30 Days)

Repossession starts when you miss payments on something you financed—most commonly a car. 

Typically, lenders won’t take action right away after one missed payment. 

They’ll usually send reminders or  you’ll get collection calls about the overdue payment. 

But once you miss 2 or 3 payments, things can start to get serious.

Default Notice (60-90 Days)

After several missed payments (usually 60-90 days), your lender will likely send you a default notice.  There are also lenders than can tolerate up to 120 days, depending on your circumstances.

You usually get a default notice via Mail.

This is an official warning that you're behind on payments.

And that repossession could happen if you don't make things right.

At this point, they’ll give you a chance to catch up…

but not forever.

Then, The Repossession Happens

If you don’t catch up or make payment arrangements, the lender will move forward with repossessing the vehicle. 

Here’s the tough part: they don’t have to give you a specific warning before taking it. 

A tow truck could come at any time, day or night, and take your car without you even knowing until it’s gone. 

This happens between after 90 days from the last payment you made.

Your Car Is Sold

Once the lender takes your car, they’ll sell it to recover the loan balance. 

Most of the time, they’ll auction it off quickly.

The problem here is that cars sold at auctions usually go for much less than their actual value.

So, the sale might not cover everything you owe.

You Still Owe the Deficiency Balance

Your car was taken away, but you're still getting a collection call.

Sounds weird? Not at all.

Here’s what a lot of people don’t know: even after your car is sold.

If the sale price doesn’t cover the entire loan, you’re still responsible for the difference. 

This is called a deficiency balance. 

For example, if you owe $10,000 on your car loan and the car sells for $7,000, you still owe $3,000. 

The lender can demand that money from you, and if you don’t pay, they might take legal action.

The Repo Hits Your Credit Report

And then comes the credit hit. 

Once your car is repossessed, the lender will report the repossession to the credit bureaus. 

This can drop your credit score significantly—by as much as 100 to 150 points. 

The repossession will stay on your credit report for up to 7 years, making it harder to get approved for new loans or financing.

You might be interested: How to Know That Your Car Loan Will be Approved 

How to Get a Repo Off Your Credit (Step-by-Step Process)

Okay, now that we’ve covered what repossession is and why it hurts your credit.

Let’s get to the good part: how to get it off your credit report.

Step 1: Check Your Credit Report

The first step is simple but super important: checking your credit report.

You can get a free copy of your credit report from the three major credit bureaus: Equifax, Experian, and TransUnion. 

You can also check Disputely’s credit monitoring.

The reason you want to check all three is that sometimes a repossession shows up on one report but not the others. 

Plus, you want to make sure the information is accurate across the board.

Here’s what to look for:

• Is the repo listed correctly?
  Sometimes lenders make mistakes when reporting to the credit bureaus. Check the details of the repo, like the date, the amount owed, and any other relevant info. If anything looks off, you’ve got a chance to dispute it.

• Is the balance accurate?
  Make sure the balance they’re reporting is correct. Sometimes, repos can be listed with an inflated balance. If there’s a mistake, this is something you can dispute as well.

If you find any errors, that’s your chance to file a dispute (more on that in Step 3).

Step 2: Negotiate With Your Lender

Next up: negotiation.

Most people don’t realize this, but you can actually negotiate with your lender to get the repo removed from your credit report. 

It’s called a “pay-for-delete” deal. 

Here’s how it works:

1. Contact your lender: Reach out to the lender who repossessed your car. Explain your situation and ask if they’d be willing to remove the repossession from your credit report if you settle the remaining balance.

2. Offer a settlement: If you have the money to do so, offer to settle the debt for a lump-sum payment. Lenders are often willing to negotiate, especially if they’re getting paid in full.

3. Get it in writing: This part is key. If your lender agrees to remove the repo in exchange for payment, make sure to get it in writing before you make any payments. Verbal agreements won’t cut it here.

Pay-for-delete agreements don’t always work, but they’re worth trying. 

Some lenders will agree to remove the repossession if you’re able to settle the debt.

If you want to learn more about Pay-for-delete, check out this article.

Step 3: Dispute the Repossession

If negotiating with your lender doesn’t work, don’t worry—you still have options.

One of the best ways to try to get a repossession removed from your credit report is by filing a dispute with the credit bureaus. 

Here’s how you do it:

1. Write a dispute letter: You’ll need to write a letter to each credit bureau (Equifax, Experian, and TransUnion) explaining why the repossession is inaccurate or unfair. Be clear about what’s wrong and why you believe the repo should be removed.

2. Provide supporting documents: Include any evidence you have that supports your claim. This could be payment receipts, communication with your lender, or proof that the repossession details are wrong.

3. Follow up: The credit bureaus have 30 days to investigate your dispute. If they find that the repo was reported incorrectly, they’ll remove it from your credit report.

Disputing repossessions isn’t a guaranteed fix.

But it’s a good way to catch any errors that might work in your favor.

Step 4: Work With a Credit Repair Company

If you’re not having any luck with disputes or negotiations, you might want to consider hiring a credit repair company. 

These companies specialize in helping people remove negative items—like repossessions—from their credit reports.

Here’s what they typically do:

• Review your credit report: Credit repair companies will take a close look at your credit report to find any mistakes or inaccuracies that could be grounds for removal.

• File disputes on your behalf: If they find anything that can be disputed, they’ll handle the paperwork and communication with the credit bureaus for you.

• Negotiate with your lender: Some credit repair companies will even negotiate with your lender to try to get the repo removed in exchange for payment.

Of course, not all credit repair companies are legit. So make sure to do your research before hiring one. 

Look for companies with good reviews and a proven track record.

Step 5: Rebuild Your Credit

Even if you can’t get the repossession removed from your credit report, don’t panic. 

You can still take steps to rebuild your credit.

Here’s how:

1. Make on-time payments: This is the single most important thing you can do for your credit. Paying your bills on time shows lenders that you’re responsible, and it will help improve your score over time.

2. Pay down your debt: High credit card balances can drag down your credit score. Focus on paying down your debt as much as possible to reduce your credit utilization ratio.

3. Get a secured credit card: If your credit is too low to qualify for a regular credit card, consider getting a secured credit card. It works like a regular card, but you’ll need to put down a deposit. Using it responsibly can help rebuild your credit.

4. Keep new credit inquiries to a minimum: Every time you apply for credit, it triggers a hard inquiry on your report. Too many inquiries can hurt your score, so try to limit how often you apply for new credit.

Can You Remove a Repossession from Your Credit Report?

So, is it actually possible to get a repossession off your credit report? 

The short answer: yes, but it’s not easy.

You’ll need to be persistent and patient. 

It might take time to negotiate with your lender, file disputes, or work with a credit repair company. 

But if you stick with it, you increase your chances of getting the repo removed and improving your credit.

Final Thoughts

Getting a repossession off your credit report is challenging.

But it’s not the end, as many people think!

I got clients come to me saying, their credit scores are hopeless due to some legal actions or repossessions. And, I would say - there’s still a way to bounce back.

The key is to take action as soon as possible. 

Whether you’re negotiating with your lender, disputing errors with the credit bureaus, or working with a credit repair company, every step you take gets you closer to cleaning up your credit.

And even if the repo stays on your report, don’t get discouraged. 

Focus on rebuilding your credit by making on-time payments, paying down debt, and using credit responsibly.

With time and effort, you can bounce back from a repossession and start building a better financial future.

Next up…

• [How to Rebuild Your Credit After a Repossession]

• [Understanding Credit Disputes: How to Remove Negative Items]