How Long Is a Repo on Your Credit Report?

A repossession occurs when a lender takes back property, typically a vehicle, that was used as collateral for a loan because the borrower failed to make the agreed-upon payments. This action is a direct consequence of defaulting on a secured loan, where the financed asset itself serves as security. A credit report serves as a detailed summary of an individual’s credit history, documenting their borrowing and repayment behaviors. It includes information such as loan payment history, the status of credit accounts, and credit limits. Credit reports are important financial documents used by lenders to assess creditworthiness and determine eligibility for new loans, interest rates, and even for services like insurance or housing.

Understanding Repossession on Your Credit Report

When a repossession occurs, it appears on your credit report as a significant negative mark. The entry typically includes specific details such as the date of the repossession, the name of the lender, the original loan amount, and any outstanding balance remaining after the repossessed item is sold. This remaining debt is often referred to as a “deficiency balance.”

Both voluntary and involuntary repossessions are recorded on your credit report. An involuntary repossession happens when the lender seizes the property without the borrower’s direct cooperation. Conversely, a voluntary repossession occurs when the borrower proactively returns the property to the lender, acknowledging an inability to make payments. Both types negatively impact your credit history.

Credit Reporting Timeframes

A repossession generally remains on a credit report for a period of up to seven years. This timeframe is established by the Fair Credit Reporting Act (FCRA). The seven-year countdown for a repossession begins from the date of the original delinquency on the account that led to the repossession, not the date the asset was actually repossessed. This “date of first delinquency” is the point at which the account first became 30 days past due and was not subsequently brought current. Once this seven-year period concludes, the repossession entry should automatically be removed from your credit report.

How Repossession Impacts Your Credit Score

A repossession has a substantial negative impact on credit scores. Credit scoring models, such as FICO and VantageScore, heavily weigh payment history. A repossession indicates a failure to repay a debt, which is seen as a significant risk by lenders. The missed payments leading up to the repossession, along with the repossession itself, are recorded as derogatory marks, lowering credit scores.

While the exact point drop varies depending on an individual’s credit profile and the specific scoring model used, initial impacts can be substantial, potentially reducing scores by 100 points or more. The negative effect is most pronounced immediately following the event, gradually lessening as the repossession ages on the report. It remains a negative factor until it is removed after the seven-year period.

Checking and Correcting Credit Report Information

Regularly reviewing your credit report is an important step in managing your financial health, especially after a repossession. You can obtain a free copy of your credit report once every 12 months from each of the three major credit bureaus—Equifax, Experian, and TransUnion—by visiting AnnualCreditReport.com. It is advisable to review these reports carefully for accuracy, checking details such as the correct dates, the lender’s name, the account status, and the amount owed related to the repossession.

If you discover any inaccurate information concerning a repossession entry, you have the right to dispute it. You can initiate a dispute directly with the credit bureau (online, by mail, or by phone) that is reporting the error. When filing a dispute, provide supporting documentation, such as account statements or payment records; do not send original documents. Once a dispute is filed, credit bureaus are generally required to investigate the claim within 30 days, or up to 45 days if additional information is provided. The credit bureau will then notify you of the results of their investigation.