I know a repossession has a negative affect on your credit score, but can you request a lesser penalty on your credit report from the credit union? I just learned about charge-offs, is that better or worse on your credit score than a repossession? My boyfriend got a repossession recently and we are going to work to build up his credit in the next couple years so we can get married and hopefully purchase a house or condo. What would be the best way to raise his score in the next 18-24 months. I know the repossession will probably be on his credit for at least 5 years but is there anything we can do to better our chances to get qualified for home loan?
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The best thing he can do is pay his bills on time, every month. If there is a balance due after the finance company or bank sells the car (or whatever was repossessed), he should make arrangements to pay that off. He’s legally responsible for it, I think. He should also ask what other fees, penalties, etc. are associated with the repossession, and pay those off.
That might sound harsh, but what you’re really doing is trying to convince creditors that you are a worthwhile risk. Leaving unpaid bills in your wake is NOT the way to do that.
Make sure all debts from now on are paid on time, all of the time. Keep the balances on credit cards below 35% since you are wanting to soon qualify for a mortgage loan.
7 years and it will show unless u settle the with the lender because there will be a residual from what they get for the vechicle when they sell it vs what they are currently owed for it and costs to repo it, and they will be looking for the balance due for a long time. as long as its there u are going to have a hard time getting a decent mortgage and rate, so figure 7 years and no way to get it off even if u settle it will still show. a repo is a repo and not a charge off a charge off is when the credit card co. or a lender gives up and says forget about the debt and doesnt try to collect, a repo is because there is some value in the item being repoed and the lender wants to recoup what they can. a charge off can become a judgement as can the balance of the repo that i mentioned before, if the lender wants to be unpleasant and play hardball, the judgement becomes a ilen against the purchase of a property and doesnt come off in 7 years and no reputable mortgage lender is going to give u a mortgage with a judgement as they cannot get clear title to your property if u default on the mortgage with a judgement if it is liened against the property so your repo adventure may not be over thats the repo lenders call,as for the rest of the credit situation, pay everything on time always no lates what so ever pay the bill as it comes in not by the due date, you are responsible if it gets lost in the mail or its late, no the post office. sorry but u have a long haul in front of u
The guy with 10 years experience is correct. It’s going to be a long haul. BUT don’t give up, you will get through it. Most of all don’t lose hope, my hubby-to-be had a repo before we got together and it’s been tough, but we’ve learned A LOT so let me share with you our experience.
You’ll get information on the repo as soon as it goes to auction. Once the bank has auctioned off the car [or what ever was repossessed] you’ll receive a statement on the full amount due. This includes fees and all other cost incurred due to the repo. Then you’ll have the amount the [repo-ed] item sold for and then the total amount due by you to clear the debt.
Since the repo is now on your credit, there is nothing you can do about that. What you CAN DO is establish a good relationship with the bank from this point on. Since they are now going to be collecting money from you, you can arrange a payment plan.
Once you have a payment plan, STICK TO IT! If you pay on time every time… that helps you build a relationship with the bank. It’s a negative that you have repo on the credit, but it’s a positive if you make steady payments and make them on time EVERY time.
Once the debit is paid off, you’ll still have it on you credit report till it reaches the statue of limitation.
We have a good payment history after the repo happened. It was like a wake up call. In a way it helped us because; yes we have bad credit due to repossession… but it’s now paid off and the account never went delinquent, not even for a day [meaning we were never late on the payment]. So, we when applied to get credit [credit cards, unsecured loans ect] people were hesitant to give us the load, but we had made steady payments each one was on time every time.
You will get a 2nd chance, it just comes at a cost… like higher interest rates and such. BUT, once you get that 2nd change… and you’ve learned how to stay on top of your bills, slowly your credit gets better and you can then get better interest rates.
By the way, charge offs don’t look so good when they have a repo next to it. Try getting “pay to delete agreements”… I have more information on ‘pay to delete agreements’… if you’re interested look at my previously asked question,
http://answers.yahoo.com/question/index;_ylt=ApsmxSi0lbn7MPyroOVk1PDsy6IX;_ylv=3?qid=20071231113911AA40bgu
Need any more help, let me know. I’ve been in your shoes with a hubby-to-be and his bad credit.