Q: I have a car that was repossessed about 5 years ago. My credit report states that it will report for another year. Is that true that it will fall off or will it be reported by another company. If so, should I try to settle the debt? How long does a repo stay on your credit?
A: Negative information (such as late payments) generally stays on your credit report for seven years. So yes, your credit reports are likely accurate in indicating that in about a year or so, that car repossession – which is already about 5-plus years old – will be deleted from your credit files.
If you make a lump sum payment to settle the account, or even make partial or monthly payments, then you would reactivate this account, so to speak, and extend the length of time for which is will be reported on your credit files.
I suspect that you may have seen this information on your Experian credit report because Experian credit reports contain a unique feature that many users find extremely enlightening.
Experian Credit Report Highlights
For all of the accounts listed in your credit file, Experian shows you “Status Details” indicating when an account is scheduled to fall off your credit report. For example, an auto loan that you paid off and closed in July 2008 will show the following Status Details: “This account is scheduled to continue on record until July 2018.” Or let’s say you had an account go to collections and ultimate get written off by a creditor.
In your case, the negative information is your car repossession. For you and anyone else with these and other negative marks in your credit file, you won’t have to wonder how long a certain blemish will haunt you. That critical Status Details section of your Experian report will give you that precise information.
No Need to Settle Very Old Debt
Regarding settling your debt, unless you’re in desperate need of getting that car repossession off your credit report before a year’s time (this might be true, perhaps, if you need to qualify for a mortgage), and unless you’ve got thousands of dollars sitting around to pay off that old car debt, I wouldn’t bother trying to settle the account.
It’s already been on your credit report for nearly six years. I would simply tough it out for the next year or so until it falls off your credit.
Frequently Asked Questions
Q: What is repossession?
A: Repossession occurs when a lender takes back a financed item because the borrower has defaulted on the loan payments. This can include vehicles, homes, and other assets.
Q: How does repossession affect my credit?
A: Repossession can have a significant negative impact on your credit score, as it indicates to lenders that you have not been able to fulfill your financial obligations. Repossession can stay on your credit report for up to seven years, making it harder to obtain credit in the future.
Q: How long do repossessions stay on your credit report?
A: Repossessions can stay on your credit report for up to seven years from the date of the first missed payment that led to the repossession. This can make it more difficult to obtain credit, as lenders may view you as a higher-risk borrower.
Q: Is it possible to remove a repossession from my credit report?
A: It is possible to remove a repossession from your credit report, but it can be difficult. If you believe that the repossession was in error or there were extenuating circumstances, you can dispute the entry with the credit bureau. You can also work with a credit repair agency to help improve your credit score over time.
Q: What can I do to avoid repossession?
A: The best way to avoid repossession is to make your loan payments on time and in full. If you are struggling to make your payments, reach out to your lender to discuss your options. You may be able to renegotiate the terms of your loan or work out a payment plan that is more manageable for you.