How repossession affects your credit score |

How repossession affects your credit score

We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But we may receive compensation when you click links on our site. Learn more about how we make money from our partners.

Plus, tips to bounce back after your score takes a hit.

Falling behind on your car payments could put you at risk of repossession. And the road back to financial recovery can be tricky to navigate. But there are ways to potentially remove a repo from your credit report or just make up those lost points.

How does a repossession affect my credit?

Repossession can wreak havoc on your credit report in a few different ways:

  • Late payments. Any payment that’s at least 30 days late may appear as a black mark on your credit report.
  • Loan default. At your lender’s discretion, you could be in default of your loan within 30 days of a missed payment.
  • Vehicle repossession. Once you’re in default, your lender can repossess the vehicle at any time, which is an additional mark against your credit.
  • Deficiency balance. Your lender will likely sell your vehicle to cover its losses, but this may not be enough to cover the loan. You’ll be asked to pay the deficiency balance, which is the remainder of what’s owed on the loan.
  • Collections. If you can’t cover the deficiency balance up front, your lender may send it to collections, which will also appear on your credit report.
  • Judgment. If the collection agency sues you to collect the deficiency balance and wins, that will be another negative mark on your credit report.

How many points will a repossession drop my credit score?

The impact a repossession has on your credit score varies depending on your individual credit history and the scoring model used. But typically, a 100-point drop isn’t uncommon after an involuntary vehicle repossession.

How long will a repossession stay on my credit report?

A repossession stays on your credit report for up to seven years from the original missed payment date. But the negative impact won’t last forever — especially if you take active steps to repair your credit.

Can I remove a repossession from my credit report?

If you don’t want to wait seven years for a repossession to fall off your report, it’s possible to have it removed — but nothing is guaranteed.

A credit repair agency may be able to help you dispute any fraudulent or inaccurate credit report items. The credit bureau will investigate your claim and contact your lender. If your lender fails to verify that the repossession was valid or doesn’t respond to the dispute within 30 days, then the repossession is removed from your report.

You can also try contacting your lender to renegotiate. Your lender may agree to remove the repossession after you’ve paid off your outstanding debt in full, and it certainly doesn’t hurt to ask.

4 tips for repairing your credit after repossession

Rev up your credit score and recover from a repossession with the following tips:

  • Clear your remaining loan balance. Even if your lender sells your vehicle to recoup its losses, you may still owe money on your car loan. Ask your lender if there’s a deficiency balance on your loan and do what you can to pay off the outstanding debt.
  • Pay your bills on time. Making on-time payments is the biggest contributing factor to your credit score and one of the best ways to rehabilitate your credit after a repossession.
  • Dispute credit report inaccuracies. Request free copies of your credit reports from Experian, Equifax and TransUnion to address any inaccuracies or errors.
  • Drop your credit utilization ratio. Ideally, you want to utilize no more than 30% of your available credit. Anything higher than this debt-to-limit ratio and your score can suffer. Analyze your available credit and trim the fat to drop your credit utilization ratio.

Monitor your credit score

Details Features
Get quarterly access to your most widely used FICO® Scores and a 3-bureau credit report
  • Get quarterly access to your most widely used FICO® Scores
  • Credit report change alerts
  • FICO® Score analysis
Go to site More info
Experian Credit Report
Experian Credit Report
Get your credit report and FICO score for just $1 with enrollment in Experian CreditWorks credit monitoring. Cancel anytime.
  • 3 credit reports
  • Track your FICO® score
  • Easy to use dashboard
Go to site More info
TransUnionCredit Report
TransUnionCredit Report
TransUnion credit score, monitoring and identity theft insurance.
  • Unlimited updates to your TransUnion credit score
  • Up to $1,000,000 in identity theft insurance
  • Personalized debt analysis
Go to site More info
Equifax Business Credit Monitor
Equifax Business Credit Monitor
Monitor your key business relationships to protect your company from losses.
  • Bankruptcy Alert
  • Derogatory Alerts
  • New Inquiry Alert
Go to site More info
$1 for a seven-day trial to get access to your credit score and credit report from TransUnion.
  • Credit reports from all 3 bureaus
  • Email alerts when your credit report changes
  • Up to $1,000,000 in identity theft insurance
Go to site More info
Details Features
Self Lender — Credit Builder Account
Self Lender — Credit Builder Account
Savings account that helps you build credit.
  • No hard credit inquiry
  • Available in all 50 states
  • It typically takes 60 days for new accounts to appear on credit reports
Go to site More info
The Credit People
The Credit People
Professionals work with you to clean up your credit and raise your credit scores. Cancel anytime.
  • 7-day trial for $19
  • Get access to your credit reports
  • Most customers see results within 2 months
Go to site More info
Online credit repair service.
  • Credit report repair
  • 24/7 credit monitoring and alerts
  • Score tracker and analysis
Go to site More info
CuraDebt: Tax Debt Relief Free Consultation
CuraDebt: Tax Debt Relief Free Consultation
Debt relief professionals helping individuals and small businesses nationwide.
  • Free consultation and 100% confidential
  • 15+ years experience
  • Debt relief help for credit cards, medical bills and taxes
Go to site
The Credit Pros: Legal Credit Repair
The Credit Pros: Legal Credit Repair
Online credit repair service that gives free consultations.
  • Unlimited disputes to help clean up your credit
  • Monitor your credit with real-time alerts
  • Protects your identity on the dark web
  • Updated credit report and score each month
Go to site More info
Lexington Law Credit Repair
Lexington Law Credit Repair
Law firm that specializes in credit repair.
  • Remove incorrect listings from your credit file
  • Get free access to your credit report
  • Personalized credit repair services
Go to site More info
Professional credit repair service that can help you create a step by step action plan. Cancel anytime.
  • Free credit consultation
  • Over 15 years of credit repair experience
  • Get help optimizing your credit file
Go to site

Bottom line

Having your car repossessed can hurt your credit a few different ways, but it’s possible to recover. Take the wheel and steer your finances by communicating with your lender early and often.

Explore the mechanics of car loans and how credit scores work to avoid a potential repossession or to lessen the credit impact of the aftermath.

Frequently asked questions

Was this content helpful to you? No  Yes

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site