How Long Does a Repossession Stay on Your Credit Report?

A repossession occurs when a lender reclaims property, such as a vehicle, because a borrower has not fulfilled the terms of their loan agreement, typically by missing payments. This event is recorded on a credit report and can significantly affect an individual’s financial standing. The presence of a repossession signals to potential creditors a history of unfulfilled financial obligations, raising concerns about future repayment ability.

The Standard Reporting Duration

A repossession remains on a credit report for seven years, as established by the Fair Credit Reporting Act (FCRA). The seven-year period begins from the date of the original delinquency that led to the repossession, not from the date the asset was actually repossessed.

During this seven-year period, the repossession will appear as a derogatory mark on the consumer’s credit profile. While its impact may lessen over time, especially as other positive financial behaviors are established, its presence can influence decisions made by lenders, landlords, and even some employers. The FCRA ensures that, after this designated period, the entry is automatically removed.

Credit Reporting Agency Procedures

The three major credit reporting agencies, Equifax, Experian, and TransUnion, manage consumer credit information. Creditors regularly furnish data, including details about repossessions, to these agencies. This data is then compiled into individual credit reports, which serve as a comprehensive record of a consumer’s credit history.

These agencies are responsible for maintaining accurate and timely records, adhering to federal regulations like the FCRA. Once the seven-year statutory period from the original delinquency date has elapsed, the credit reporting agencies are mandated to automatically remove the repossession entry from the credit report.

Disputing Repossession Information

Consumers have the right to dispute information on their credit report if they believe it is inaccurate. Before initiating a dispute for a repossession entry, gathering all relevant documentation is important. This includes evidence of payments made, correspondence with the lender, the original loan agreement, and any specific details highlighting the inaccuracy, such as incorrect dates or amounts.

To initiate a dispute, contact the credit reporting agency that is reporting the incorrect information. This can be done through their online portals or by mail. The dispute should clearly state the item being disputed, the reason for the dispute, and include copies of any supporting documents. The credit reporting agency will then forward the dispute to the creditor or information furnisher for investigation.

Under the Fair Credit Reporting Act, the credit reporting agency has 30 days to investigate the dispute and respond to the consumer. If the investigation confirms the information is inaccurate or cannot be verified by the furnisher, the repossession entry must be removed from the credit report. If the information is found to be accurate, it will remain on the report for the full seven-year duration.