How Long Does a Repossession Stay on Your Credit Report?

Credit reports are comprehensive records detailing an individual’s debt and credit history. They play a central role in a person’s financial life, influencing decisions made by lenders, insurers, landlords, and some employers. These reports compile information from various creditors, providing a snapshot of credit activity and financial obligations.

A repossession is a significant event on a credit report, indicating a lender seized property due to missed loan payments. Understanding how these events are recorded and their duration is important for financial health. This article clarifies the process of repossession reporting and its typical duration on credit reports.

Understanding Repossession Reporting

A repossession occurs when a lender reclaims collateral, such as a vehicle, because a borrower has defaulted on a loan agreement. This signifies a failure to meet secured debt terms. Creditors report repossessions to the three major credit bureaus: Experian, Equifax, and TransUnion.

When a repossession is reported, specific details are added to the consumer’s credit history. This information includes the date of the repossession, the name of the original creditor, the account number, the original loan amount, and the current status of the account. The status might be listed as “charge-off,” indicating the lender wrote off the debt as a loss, or “settled for less than full amount” if a partial payment was made, or “paid” if the deficiency was fully satisfied.

The distinction between voluntary and involuntary repossession relates to the property surrender process, not its credit report appearance. In a voluntary repossession, the borrower returns the property to the lender to avoid an involuntary seizure. Both types of repossessions are reported to credit bureaus and reflect negatively on a credit report.

Duration on Credit Reports

A repossession remains on a credit report for seven years. This timeframe applies consistently across the three major credit bureaus.

The seven-year reporting period begins from the date of the original delinquency that led to the repossession, not the date the property was repossessed or the account was charged off. This original delinquency date is when the account first became significantly past due and was never brought current.

The type of repossession, whether voluntary or involuntary, does not alter this seven-year reporting period. Paying off any deficiency balance after the repossessed property is sold does not shorten the time the repossession stays on the credit report. While paying the deficiency may update the account status to “paid” or “satisfied deficiency,” the repossession event will still be visible for the full seven years.

Checking and Correcting Your Credit Report

Individuals can review and ensure the accuracy of their credit reports. Consumers are entitled to a free copy of their credit report once every 12 months from each of the three major credit bureaus—Experian, Equifax, and TransUnion—through AnnualCreditReport.com. This centralized website is the federally authorized source.

When reviewing a credit report, scrutinize the repossession entry for inaccuracies. Verify the date of repossession, date of last activity, charge-off date, creditor’s information, and reported amounts. Note any discrepancies like incorrect dates, wrong account numbers, or inaccurate balances.

To dispute inaccurate information, contact the credit bureau(s) reporting the error. Disputes can be initiated online, by mail, or over the phone. When filing a dispute, clearly explain the inaccurate information and provide supporting documentation. Credit bureaus are required to investigate within 30 to 45 days. If the investigation finds the information inaccurate or unverifiable, the credit bureau must update or remove the entry; otherwise, it remains on the report.