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Posted in Auto Loans
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Question By
LorenzoV

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Which is looks better on your credit report Paid Repo vs Paid Charge Off?
My situation:

Currently I have a motorcycle loan. The loan amount was for $9500, loan was paid for 1yr and 4months on time, late for 2 months, and then unpaid for the last 7months, due to high interest rate and late fees, the current balance is now $9700. I still have not surrendered the motorcycle (I am unable to, due to being out of the country) it is still in my possession. The motorcycle loan company currently has my loan marked on the credit report as a Charge-Off. I have contacted the loan company and they are willing to settle for the amount of $7900. I can only possibly afford $7000 maybe less.

I will be returning to the U.S this month and need to figure this out. I have been offered a great job and I am fairly sure I will have the ability to rebuild my credit. This motorcycle loan is the only line of credit I have on my credit report. Otherwise I have not had a credit card in at least 10 years nor any other types of credit lines. I plan on getting some secured credit cards that report to the big three CA's. I also plan on buying a house in the next 3years which leads me to my question:

Which option will be easier to cover up with 3 years of future good credit:
A) Let them repossess the motorcycle and pay the unpaid balance (I'm sure they might not get the full amount they need due to some wear and tear and damage on the motorcycle.
B) Hold on to the motorcycle and pay the settlement amount, take the "Charge off - paid settlement for less than balance"
C) Re-negotiate the settlement amount, "Charge off - paid settlement for less than balance" and keep the motorcycle for transportation when I get back

Thank to all

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