Banks and auto lenders do report car repossessions to the credit bureaus, and repossessions stay on credit reports for seven years. But while a repo remains on your file for this length of time, the effects of repo can reverse itself if you practice good credit habits. A drop in credit score and higher rates are typical after losing a car to the bank. However, a repo on your record doesn't have to result in a permanent low score.
Instructions
- 1
Get another auto loan from a bad credit or subprime auto lender. Start rebuilding your credit score with a new auto loan. Purchase an affordable car from a dealer that offers "fresh start" programs to help people with past repossessions. The interest rate is higher on these sort of loans but as your repay the loan, the lender will update your credit report with positive information.
2Avoid defaulting on your other credit accounts or loans. If you have a student loan, home loan or credit cards in your name, pay these creditors on time every month to help fix your credit score after a vehicle repossession.
3Eliminate outstanding account balances to help raise your score. The amount owed on your accounts make up 35 percent of your FICO credit score. Use credit but then pay off account balances immediately to avoid accumulating debt.
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