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Former Auto Dealer's Secrets to Legally Remove Repos for Credit Repair Clients

By: Keenan Jones November 25, 2019

Kenneth Jarman has spent a long time working in the car business. Over the years, he’s been a salesman, a repo man, and until 2015, a dealership owner.

But, after more than 20 years at the dealership, Kenneth realized he was burnt out and needed to find a new way to insert his knowledge of the automotive industry into the world.

While researching the next professional avenue he could pursue, Kenneth stumbled upon the world of credit repair, and was intrigued. He loved the idea of tackling a business endeavor as a sole proprietor and wanted to run a business that didn’t require a ton of staff members to manage.

Little did he know his decision to choose credit repair, with an emphasis on automotive finance, would open doors to mega success—for himself and for his clients.

Read on to take in critical information Kenneth shared at the 2019 Credit Repair expo, about starting a business and tackling round one dispute tactics for clients with auto repos on their credit reports.

Focusing on The Gap of Knowledge Between Auto Repos and Credit Repair

When Kenneth left his cushy position at his car dealership, he did so with a plan. He studied enough about credit repair—and spoke with enough specialists in the industry—to know there was a significant shortage of credit repair specialists who understood automotive financials.

Misunderstanding the laws governing automotive financing can cost consumers big time. Actually, between late payments and collections, an automotive repo can cause a 100-point score drop on a consumer’s credit score. The problem is, as Kenneth explains, not all repos that land on your client’s credit report are legitimate.

Just as laws for credit repair vary from state to state, so do the laws about automotive financing and lending. That’s why, by taking the time to delve deeper into the intersect between credit repair and auto financing, Kenneth was able to find his niche. His work has made the difference between very poor and excellent credit scores for his clients.



Don’t Overlook this Common, Factual Error

The biggest tip Kenneth gave to the audience at the Credit Repair Expo was to look for the most common error that plagues credit scores in terms of auto repossessions. Kenneth advises all credit repair specialists to ask your client where the contract for their auto loan was signed. Was it signed at a dealership?

If the answer is yes, study up on the 20%-80% rule.

Kenneth says that less than 20% of loans signed at a dealership are actually loans. The other 80% are credit sales, which means the dealership is the lender, and the ‘lender’ that appears on your client’s documentation isn’t actually a lender. Instead, it’s an organization that purchased a contract or debt from the dealer.

This minor detail is one that bureaus inaccurately report on all the time. If your client’s credit shows a loan as opposed to credit-sales, it may be low hanging fruit for their first-round dispute letter.

Using credit repair software, like Credit Repair Cloud, can help you easily discover these fallacies to help you start your first round dispute letter.

Is a Payment Listed as a Repo?

After your client’s car has been repossessed, are the monthly payments still burdening your client’s credit report? In short, if a car has already been repossessed, your client should not be defaulting on additional payments. If there are missed payments on your client’s credit report, you have factual errors worth disputing.

Often, after an auction, creditors will try to apply the entire sale of the vehicle toward the total balance due on a loan, instead of the amount in default by your client. This creative accounting is the loophole that can create clerical errors on your client’s credit report and creates ammunition for a dispute.

Be Specific with Credit Bureaus

When clients come to you questioning the legitimacy of the repos on their credit scores, it’s time to get to work on the first round dispute letters. Kenneth explains his first-round process is similar to the process credit specialist Derrick Harper uses. He means that during the first round, Kenneth sends the dispute letter as an investigation or question rather than an argument.

Kenneth recommends using Credit Repair Cloud to sort through the marks on a client’s credit report. Then, zero in on one or two things you suspect are inaccurate before approaching the credit bureaus.

By asking the bureaus to investigate an error, rather than disputing it outright, it’s easier to get a response from the bureaus. The Fair Credit Reporting Act (FCRA) gives bureaus 30 days to investigate each request.

As a credit repair specialist, follow up every 35-40 days to ensure the bureaus are sticking to their deadlines.

Know Your State’s Laws

Auto financing laws are dictated by each individual state which will affect how you can help your clients.

Different state laws mean that across the country, there are unique laws that govern loan terms like:

  • Max APRs
  • Statute of limitations
  • Regulations in the uniform commercial code
  • How monthly payments and charge offs work after a repossession
  • If you’re allowed to be at an auto auction after a repossession

By knowing the ins and outs of your state’s laws, you are more likely to uncover errors or illegal actions taken by the lenders when a repossession occurs. The more knowledge you have, the more effective you can be for your clients.

Share Your Knowledge to Acquire New Business

Kenneth also tells new credit repair specialists they should be open to sharing their knowledge of the industry, regardless of how green you are.

“Until you share your knowledge, you won’t grow your business,” says Kenneth.

Marketing is about sharing your experiences and yourself. The end result, according to Kenneth, is more business. “The more you share, the more you learn, as well. You’re bound to get a question you can’t field. That only grows your knowledge of the industry, which makes you more valuable to clients.”

Are you ready to start learning more about credit repair, so you can join the revolution? Start with this free, online training to get your feet wet.

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