How can I fix my credit score after a repo?

You can fix your credit after a repo by disputing errors on your credit report, paying your bills on time, keeping your credit utilization low, diversifying your credit mix, and avoiding too many hard inquiries. A repossession will remain on your credit report for 7 years, though the impact will lessen over time.

You can use WalletHub’s free credit score simulator to learn how different actions can improve your credit score after a repossession as well as how quickly you can expect to see changes.

How to Fix Your Credit Score After a Repo

1. Dispute Errors on Your Credit Report

   If there are errors adversely impacting your credit, you can file a dispute with all three of the major credit bureaus. If you have supplemental documentation, include it with your claim. The credit bureaus typically respond to disputes within 30 to 45 days.

2. Make On-Time Bill Payments

   Payment history is the most significant factor impacting your credit. In order to rebuild your credit following a repossession, it’s important to make all of your bill payments on-time in the future. Even having one late payment reported to the credit bureaus can significantly damage your credit, although the impact lessens over time.

3. Add Rent or Utility Payments

   Rent and utility accounts are not automatically listed on your credit report. Third parties like LevelCredit, Experian Boost, and eCredable Lift can send the three major credit bureaus your payment history. A record of on-time payments will improve your credit.

4. Keep Credit Utilization Low

   Ideally, your credit utilization ratio should be between 1-10%. Anything over 30% may negatively affect your score. There are several ways to reduce your credit utilization, including paying down your card balances, increasing your credit limits, and applying for a new credit card. Note, if you apply for a credit limit increase or new card, the issuer may perform a hard inquiry which will temporarily lower your score by a small amount, typically 10 points or less. However, in the long-term, you will benefit from having more available credit. 

5. Reduce Your Number of Hard Inquiries

   Although increasing your overall credit limit and keeping your credit utilization low will help your score, applying for multiple cards at the same time will damage it. In fact, experts generally recommend applying for no more than two credit cards per year. Credit inquiries remain on your credit report for up to 24 months and affect your score for up to 12 months. Additionally, new credit cards lower the average age of your accounts, which negatively impacts your score.

6. Diversify Your Credit Mix

   Credit cards or lines of credit are considered revolving accounts, while a personal loan, mortgage or auto loan is categorized as an installment account. Having a mix of both revolving and installment accounts actually helps your credit. Although your credit mix is not as important a factor as your payment history or credit utilization, it can still have an impact on your score.

You can check your credit report and get personalized credit-improvement tips for free here at WalletHub.