How Long Does a Repo Take to Get Off Your Credit?
Discover how long a repossession affects your credit report, its impact, and what you can do to understand and manage its presence.
A repossession occurs when a lender seizes property, often a vehicle, because a borrower has failed to make payments as agreed in a loan contract. This typically follows a period of missed payments. The immediate consequence is the loss of the asset. Understanding how a repossession impacts an individual’s financial standing, particularly their credit report, is important for navigating its long-term effects. A repossession on a credit report signals to future creditors a significant financial setback and an inability to fulfill loan obligations.
Credit Reporting Duration
A repossession remains on a credit report for seven years. This timeframe is consistent with the Fair Credit Reporting Act (FCRA), which governs how long most negative information can be reported by credit bureaus. The seven-year reporting period begins from the “original delinquency date,” which is the date the account first became delinquent and was never brought current again, rather than the date of the actual repossession or the charge-off. For example, if payments were first missed in January 2020, the seven-year clock starts ticking from January 2020, even if the repossession occurred months later. This means the negative entry will be removed from the credit report around January 2027.
This seven-year period applies to various negative items associated with the repossession, including late payments that led to it, the default itself, and any subsequent collection accounts. Even if the underlying debt is paid or settled after the repossession, the record of the repossession and associated delinquencies remains on the credit report for the full seven-year duration from that original delinquency date. These entries are automatically removed once the seven-year mark is reached, with no action required from the consumer.
Related Credit Report Entries
A repossession rarely appears as a solitary entry on a credit report; it is often accompanied by several other negative marks reflecting the financial distress leading up to the event. The original loan account will show a history of missed or late payments, reported for each month they occur. These delinquencies, especially those 30, 60, 90, or 120 days past due, significantly impact payment history, a primary factor in credit scoring.
Beyond late payments, the account status will be updated to reflect a “default” and then a “repossession” or “voluntary surrender.” Both involuntary and voluntary repossessions are recorded as negative marks and carry similar weight on a credit report, though a voluntary surrender might slightly mitigate some fees. If the sale of the repossessed asset does not cover the full outstanding loan balance, a “deficiency balance” remains. This deficiency balance can then be sold to a collection agency, resulting in a new collection account entry on the credit report. These collection accounts also remain on the report for seven years from the original delinquency date of the underlying debt. If the lender or collection agency sues to collect the deficiency and obtains a court order, a “judgment” may be recorded, which can also appear on the credit report and further impact creditworthiness.
Impact on Credit Scores
A repossession has a significant negative impact on an individual’s credit score. Payment history is the most influential factor in calculating credit scores, accounting for approximately 35% of a FICO Score. A repossession indicates a serious failure to meet financial obligations, leading to a significant drop in credit scores, potentially 100 points or more, depending on the individual’s credit history and score level before the repossession. Higher initial credit scores experience a more pronounced decrease.
The impact of a repossession is most severe immediately following its reporting. As the repossession ages on the credit report, its negative influence gradually lessens, even though it remains visible for the full seven-year reporting period. Credit scoring models, such as FICO and VantageScore, weigh more recent information more heavily than older information. Therefore, while the repossession will continue to affect the ability to obtain new credit or favorable terms, its detrimental effect on the score will diminish over time, particularly as positive payment history is established on other accounts.
Obtaining Your Credit Reports
To understand the specific details of a repossession entry on a credit report, individuals can obtain free copies of their credit reports from the three major nationwide credit bureaus: Equifax, Experian, and TransUnion. The Fair and Accurate Credit Transactions Act (FACT Act) mandates that consumers are entitled to at least one free credit report annually from each bureau. The official way to access these reports is through AnnualCreditReport.com. This centralized website allows consumers to request reports from all three agencies at once or to stagger their requests throughout the year.
When accessing these reports, carefully review all sections for accuracy and completeness. Look for entries related to the repossessed account, including the original loan, any reported late payments, charge-offs, collection accounts, and the repossession itself. Verify account numbers, dates of delinquency, reported balances, and the account status to ensure all information is correct. This review provides a comprehensive view of how the repossession is being reported and helps identify any discrepancies that may warrant further action.
Disputing Inaccurate Information
If an individual identifies inaccurate or incomplete information regarding a repossession on their credit report, they have the right to dispute it with the credit bureaus and/or the data furnisher, such as the original lender or collection agency. The Fair Credit Reporting Act (FCRA) outlines the process for these disputes. To initiate a dispute, gather all supporting documentation, such as payment records, loan agreements, or any correspondence that proves the inaccuracy.
The dispute can be filed directly with each credit bureau (Equifax, Experian, and TransUnion) that reports the error, either online, by phone, or by mail. When mailing a dispute, consider sending it via certified mail with a return receipt requested to confirm delivery. The dispute letter should clearly identify the specific error, provide a detailed explanation of why it is inaccurate, and request its correction or removal. Credit bureaus are required to investigate the dispute within 30 days of receipt, and if the information cannot be verified, it must be removed or corrected.