Of all the financial hardships you can face, one stands out the most…
It stands out because it has the most immediate impact on your day-to-day life…
It’s VEHICLE REPOSSESSIONS 🚙🚚🛻
Having your car repossessed can be devastating! 😱😱😱
You not only lose your vehicle in the short term, but the hit you take on your credit report will make it harder and more expensive for you to get back on the road! 😤😤😤
So, in this week’s podcast, I’m going to teach you all my secrets for removing repossessions from credit reports!
Did you know there are roughly 288 million registered vehicles in the U.S?
In a country with 330 million people, that’s nearly one vehicle per person!
Now, for some of these people, having a car is a luxury, to play with on the weekends. But for most of us, especially people like me, living here in Los Angeles, you need a car to survive!
So, today I’m going to talk about repossessions and how to eliminate them from credit reports!
What exactly is a repossession?
Repossession is when a bank or financial institution takes possession of your vehicle after you fall behind on your payments.
It’s a reminder that you don’t actually own it…They do.
Your vehicle purchase contract should include details about how and when your auto lender can repossess your car.
You can have your vehicle repossessed within three months of defaulting on your loan…
Depending on your contract, your lender may be able to start the repossession process right after the first missed payment! 😡
Sometimes auto lenders repossess vehicles without even warning the customer! 😡
And sometimes they repossess vehicles without even having permission from the court! 😡
Now, vehicle repossession laws vary by state…and there are two major types of repossession: VOLUNTARY and INVOLUNTARY.
Voluntary repossession is when you give your car back to the lender, usually because you can’t afford to make the monthly payments.
Involuntary repossession, the type most people are familiar with, is when the lender comes to take back the vehicle.
That’s when you walk out your door and watch your car being towed away…
Repossessions are different from almost every other type of item on a credit report because of the little nuances within the auto loan contracts.
Anyone who’s ever fought to remove a repo from a credit report knows how tricky they can be to eliminate.
But it’s not impossible!
You have options!
Here’s why this is important…
Depending on the source, there are between 1.5 and 2 MILLION vehicles repossessed in the United States EVERY YEAR.
That’s 4 to 5 THOUSAND repossessions EVERY DAY!
That’s an astounding number of potential clients in desperate need of credit repair!
Some are parents who can’t drive their children to school…👪
Some are workmen who can’t take jobs because they no longer have a truck…🚧
But remember, repossessions don’t just leave you without a car…🚘
They negatively impact your credit score for years to come, making it harder to qualify for another car loan, credit card, or mortgage.
So, removing these repossessions will get your clients back on the road and back on their feet.
Here are three proven tactics to help you permanently remove repos from credit reports:
The FIRST TACTIC is a FACTUAL DISPUTE
Factual Dispute usually works like a charm but it’s a bit advanced and it ONLY applies when:
- The loans have GAP insurance
- The vehicle was sold at auction after repossession
- The balance was sold to a 3rd party
It must meet ALL of those conditions or you’re wasting your time.
Here’s the good news…
Most vehicles financed from dealerships have GAP insurance, and if you have GAP insurance for the life of the vehicle, a prorated portion of the vehicle is covered IF…and only IF…the vehicle is considered a loss.
Now, a repossession is a loss, so when this happens the refund is sent to the FINANCING COMPANY.
The FINANCING COMPANY receives this GAP payment long after the account is sold to the 3rd PARTY DEBT COLLECTION AGENCY and never updates the true balance of the loan on your credit report.
This means the balance is INACCURATE…which means it is FACTUALLY INCORRECT…
And THAT my friend is the key to removing the repo using the Factual Dispute strategy.
You might be wondering how you actually file the dispute.
First, remember, with all credit repair strategies, timing is critical.
You must complete STEP #1 and STEP #2 on the same day!
Demand validation with certified mail, with a return receipt on the account, with the 3rd PARTY DEBT COLLECTION AGENCY.
Chances are they will respond with the wrong balance because the GAP insurance paid the FINANCING COMPANY and the FINANCING COMPANY did not report the payment to the 3rd PARTY DEBT COLLECTOR.
Do you see what I mean when I said this is a little advanced? 😅😅😅
It’s okay if you need to take a moment, scroll back up, and review.
This is all very important and I want to make sure that you learn it.
STEP #2 (And be sure to do this on the same day as Step #1)
Contact the GAP company and request a refund for the loss of the vehicle.
The GAP company will immediately tell you that a payment has already been made to the FINANCING COMPANY.
You need to ask for proof and they will send you a receipt for the payment made to the FINANCING COMPANY.
Get a large envelope, and address it to the credit bureaus by certified mail with return receipt. Include:
- A copy of the receipt from the GAP company
- A letter to the 3 BUREAUS explaining the balance reported was not accurate
- A copy of the validation demand you sent to the 3rd PARTY DEBT COLLECTION AGENCY
- A copy of the signed return receipt from your debt validation letter
- And the response you received from the 3rd PARTY DEBT COLLECTION AGENCY that shows the wrong balance
Now, this process usually results in a deletion…
But if not, you should file a complaint with CFPB. Then…
Resend EVERYTHING to the BUREAU AGAIN! 📨 📩 📫
But this time include a copy of the CFPB complaint to the bureaus and demand removal.
You might also want to send the same to the 3rd PARTY DEBT COLLECTION AGENCY.
The SECOND TACTIC is “CREDIT SALE DISCREPANCY”
If the repossession you’re trying to remove doesn’t fit the criteria for the tactic I just went over, “Credit Sale Discrepancy” is another Factual Dispute tactic that is often very successful.
It simply means there’s a minor detail issue in the terminology used to indicate the type of account listed on your report.
See, auto dealerships are set up to make sales in one of two ways:
- An Installment Loan
- A Credit Sale
An Installment Loan means the dealer lends you money and you pay the dealer in “installments” until the loan is paid in full.
A Credit Sale means the dealer sold the loan to a lender.
Most dealers prefer “Credit Sales” because they get paid immediately, as opposed to collecting interest over a long period of time with loans.
Now, if you or your client signed your documents at a dealership, there’s about an 80% chance it is a “Credit Sale”, not an “Installment Loan.”
So take a good look at your credit report, if it says “loan” (and it usually does), you can factually dispute the repossession based solely on that specific factual error in how it’s listed on the report.
Remember, if you are confident about the fact that it is being misreported, don’t give up if they verify it. Ok? Don’t give up. Sometimes this takes pressure and persistence.
You can always send more letters. You can always follow up with a creditor or bureau warning letter. Warning them that you are going to report them.
You can file complaints and follow up again, and even then, if they are still unwilling to correct your report – you always have the option of working with an FCRA attorney that may be able to not only permanently remove the repo but possibly settle and put cash in your clients pocket.
And I got one more for you…
I call the THIRD TACTIC…“How the heck was I late paying after you took the car?”
So, if you’ve ever dealt with a repossession, typically, the vehicle is sold at auction for a fraction of what is owed…often leaving a deficiency balance.
Once that happens, you ask yourself, how in the world can the original creditor still report late payments? 😖
Well, they shouldn’t! 🚨
But they often do and that is the key to identifying a factual error and ultimately, getting it removed. 🔑
The reporting of late payments after a repossession occurs… is an error!
When this happens, simply dispute the error with pinpoint accuracy. You want to point out that the vehicle was repossessed, and therefore, defaulting on payments at this point is inaccurate.
Pretty cool right?
Anyway, these are three proven tactics for removing repossessions from credit reports.
And they really work!
If you didn’t catch everything I just covered, take your time, review it, relisten to the podcast, and take notes.
Repossessions impact people’s lives too much for this not to be handled quickly and with the best possible care. When you get your clients back on the road and back on their feet, they are going to be grateful.
Repossessions and other high-level negative items are covered in our Credit Repair Cloud Advanced Disputing Course!
And we have all these letters I talked about inside Credit Repair Cloud. If you don’t already have a Credit Repair Cloud account, check it out. It’s the software that most credit repair businesses in America run on. Just sign up for a 30 day free trial at creditrepaircloud.com/freetrial
And If you’d like me to hold you by the hand as you launch your own credit repair business, check out our Credit Hero Challenge!
It’s an amazing program where you’ll learn the processes that have made millionaires, and it costs less than you’ll spend taking your family to McDonald’s for dinner.
We’ve got another challenge starting in a few days so grab your spot right now at CreditHeroChallenge.com!
Until then, remove those repossessions…
And keep changing lives!
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