What is a repossession? A repossession is a process in which a credit lender or their agent takes back any items bought on credit or if pledged as collateral for a loan. The item is repossessed from a borrower that has failed to pay their loan payments on time and eventually defaults.
Defaulting on a loan means you failed to uphold the agreement of the car loan. Once reported, repossession will remain on your credit report for seven years.
For example, your car loan can be considered in default 30 days after the payment was due. Lenders can repossess the car at any point once you are in default. Typically, they do it no earlier than 60 days after you miss a payment.
Once the lender takes the vehicle back, it usually will resell it to recoup its losses. If the vehicle sells for less than you owe, you will have to pay the difference, known as a “deficiency balance.” The lender may also charge you towing and storage fees associated with the repossession.
How do you remove a repossession from your credit report? A credit repair agency like TCC can help you, especially if the repossession is wrong or false. Start now.