How Long Does a Repo Stay on Your Credit Report?

A repossession occurs when a lender takes back property, often a vehicle, because a borrower has failed to make the agreed-upon payments. This action significantly impacts an individual’s financial standing. Such an event is recorded on credit reports, signaling to potential lenders a past inability to fulfill financial obligations.

The Reporting Period for Repossessions

A repossession remains on a consumer’s credit report for up to seven years. This reporting period is established under the Fair Credit Reporting Act (FCRA), which governs how consumer credit information is used. The seven-year timeframe begins from the date of the original delinquency that led to the repossession, not from the date the asset was repossessed or when the account was charged off.

This duration applies whether the repossession was voluntary, where the borrower returned the asset, or involuntary, where the lender seized it. Even if a deficiency balance—the amount still owed after the sale of the repossessed property—is paid off, the repossession remains on the credit report for the full seven-year period. Paying the balance only updates the account status to show a zero balance owed, but the record of the repossession remains.

How Repossessions Appear on Credit Reports

Information related to a repossession is displayed within the “account history” or “tradeline” section of a credit report for the specific loan account, such as an auto loan. This entry indicates the account’s status, often marked as “repossessed” or “charge-off” if the remaining debt was written off by the lender.

The entry includes details like the original creditor’s name, a partially masked account number, the date of last activity, and the original loan amount. Any remaining deficiency balance from the repossession will also be noted. Major credit bureaus (Experian, Equifax, and TransUnion) present similar information, though their specific formatting may vary.

Credit Score Implications of Repossessions

A repossession is considered one of the most damaging events for a consumer’s credit score, often resulting in a substantial reduction. This severe impact stems from a significant failure to meet financial commitments. Credit scoring models, such as FICO and VantageScore, heavily weigh payment history, making a repossession a particularly detrimental mark.

The negative effect on a credit score is amplified because it directly impacts the “payment history” component, which is the most influential factor in these scoring models. If a deficiency balance exists, it also negatively affects the “amounts owed” category. The magnitude of the score drop can vary based on an individual’s credit profile before the repossession, with higher initial scores often experiencing a more pronounced decline.

While the repossession remains on the credit report for the seven-year period, its negative influence on the credit score diminishes over time. This lessening impact occurs more readily if the individual maintains other positive credit behaviors, such as making timely payments on other accounts. The repossession will remain a significant negative factor throughout its presence on the report.

Disputing Repossession Information

Consumers have the right to dispute any information on their credit report that they believe is inaccurate or incomplete. This right is protected under the Fair Credit Reporting Act (FCRA), which mandates that credit bureaus maintain accurate information. Common inaccuracies related to repossessions might include an incorrect date of first delinquency, an inaccurate deficiency balance, or an account mistakenly attributed to the consumer.

The process for disputing involves contacting the credit bureaus (Experian, Equifax, and TransUnion) or the original creditor directly. When a dispute is filed, credit bureaus are required by the FCRA to investigate the claim within 30 to 45 days. If the investigation confirms that the information is inaccurate or cannot be verified, it must be corrected or removed from the credit report.