How long does a repo stay on your credit

how long does a repo stay on your credit

Auto repossessions are expected to climb in 2023.1 When your car is taken away, there may be a list of worries on your mind. How will you get your car back? Or, how long does a repo stay on your credit history? Keep reading to find out more about the repo process and its impact on your credit.

Auto Repo Can Stay On Your Credit for Up to Seven Years

Negative marks, like vehicle repossession, can affect your credit report for up to seven years.2 Seven years is a long time, and since car repossession stays on your credit for that time, you want to do everything you can to avoid this kind of negative mark. 

Kinds of Car Repossession

There are two main types of vehicle repossession: voluntary surrender and involuntary surrender. 

  1. Voluntary surrender, also called voluntary repossession, occurs when delinquent borrowers give up their vehicle to their auto loan lender. Borrowers may voluntarily surrender their vehicles if they know they cannot repay their auto loans and have no other way of finding funding. 
  2. Involuntary repossession occurs when a lender forcibly takes a delinquent borrower’s vehicle, usually after that borrower shows no reasonable efforts or attempts to make good on their missed payments. With involuntary repossession, the actual repossession can happen at any time. 

Here is a breakdown of each process: 

Voluntary RepoInvoluntary Repo
Borrower’s ActionBorrower willingly surrenders the vehicle.Borrower does not willingly surrender the vehicle; it is taken by the lender.
TimingBorrower initiates the surrender process.Lender can repossess the vehicle at any time after missed payments.
Repossession StepsBorrower contacts lender to arrange surrender.Lender takes possession without borrower’s consent.
Borrower’s InvolvementActively cooperates with the lender.Typically does not cooperate with the lender.
Credit Score ImplicationsNegative impact on credit score, but may be less severe than involuntary repossession.Negative impact on credit score, and it’s generally more severe.
ConsequencesMay avoid certain repossession fees and costs.May incur additional fees and costs for the repossession process.

The Basics of Your Credit Report, Credit Score, and Credit History

The purpose of credit scores and credit reporting is to give lenders and financial institutions an idea of how financially responsible and trustworthy a consumer is. Before 1970, the process of 

compiling one’s credit history went wildly unchecked. Not all consumers had access to their reports, and credit scoring tactics were inconsistent. But, after the Fair Credit Reporting Act (FCRA) was enacted in 1970, credit reporting became much more regulated. 

Under this act, consumers are entitled to access their credit reports, containing all the information lenders review when determining loan approval. This act also prohibits using race, sex, or social status as a means of judging creditworthiness

How Does Repossession Affect Your Credit Report History?

Unfortunately, auto repossession can have a detrimental impact on your credit report. In order for repossession to occur, you must have multiple missed car payments on your account. Since payment history makes up 35% of your credit score, account delinquency can cause your score to drop quite a bit. 

Having one missed payment on your loan isn’t the end of the world; you may see your credit score go down a few points, but chances are your score will bounce back in a month or so. Additionally, if it is your first missed payment, lenders may provide flexibility. However, don’t let making late payments become a habit! If you let your car loan balance go unpaid for too long, your lender may send your account to a collection agency. A collections account can stay on your credit for seven years. 

How Much Does A Repossessed Car Cost?

Car repossession can get expensive in a few different ways. First, in order to get your car back, you will have to become current on your delinquent car loan. This may involve making payments for multiple months and paying late or insufficient fund fees to take care of the full remaining balance. 

Furthermore, you may possibly have to go to an impound lot to pick up your vehicle. Here, you may be required to pay other kinds of repossession fees before you can gain access to your repossessed car again. The amount you still owe on your car loan after repo is called the “deficiency balance.” 

Ways To Improve Your Credit While Recovering From Car Repossession

While car repossession, often a result when a borrower defaults, can dent your credit score, recovery and a return to good standing are possible. Although it may not happen immediately, there are steps you can initiate now to help you get back to a good credit score. Positive accounts remain on your credit report longer, which can assist in overshadowing past-due accounts.

Focus On Rebuilding Your Payment History and Keeping Accounts Current

The most important factor for credit is payment history, so making timely payments is key. Ensuring your accounts are current reflects your commitment to managing any outstanding debts. You can simplify this process by enrolling in autopay for loan payments.

It’s crucial to allocate time each week to assess your finances and ensure that you are making on-time payments for your debts, including new credit accounts. It’s all about establishing a pattern of on-time payment.

Check Your Credit Report Often 

Stay familiar with your credit reports and check them often, perhaps about once every month or so. Under the FCRA, consumers are entitled to one free credit report yearly from each credit bureau, but you can also get an unofficial report any time you’d like. Many banks and credit card companies allow their customers to view their free credit scores and reports at no cost. 

Checking your credit report often lets you see how your financial habits can affect your credit score in real time. This familiarity also allows you to make adjustments if you see some of your behaviors are affecting your credit in a negative way. 

For example, if you apply for many loans within a short period of time, you will see your credit start to drop. If you see your score drop too much, that can serve as a warning to limit your applications for lines of credit for a while. Or if you see a late payment, you may be more on top of your other debts. Staying familiar with your credit report may also help you identify credit reporting errors quickly, saving your credit score from unnecessary damage. 

Take Advantage of Credit Report Reward Programs

If your financial situation is complicated, you may want to consider working with a credit repair company. There are many credit repair companies that offer discounted or even free services for people who need help coming up with a credit recovery plan. 

There are also extra credit reward programs offered by some of the three major credit bureaus/consumer reporting agencies. For example, Experian has a program called Experian Boost that allows consumers to get smaller bills, like subscription accounts reported on their credit report or reports similar to how loan payments would. That way, you can help raise your credit score just by paying your Netflix subscription on time! 

Stay Away From Predatory Loans

Some types of bad credit loans, like payday loans, are advertised as being a quick and easy way to get money, but this is not usually the case. Beware of predatory lending practices that may hurt your credit history and prevent you from improving your credit. 

Refinance To Get a Better Deal 

If you currently have a car loan with extremely high interest rates or an unreasonable payback schedule, you may want to consider refinancing with a new loan. Personal loan options and installment loans are popular for refinancing. The goal here is to get a better payment plan and lower rates. You may be wondering, does refinancing a car hurt your credit? On the contrary, refinancing debt can actually help improve your credit score! Consolidating debt can also help lower the amount of payments you make each month, which can end up saving you money on interest rates in the long run. 

FAQs: How Long Does Repossession Stay On Your Credit?

How soon after a missed car payment can the lender start the car repossession process? 

Typically, lenders might initiate a car repo after multiple missed payments, but it can vary depending on the lender and the terms of the loan agreement. In most states, this requires a court process.

If I get my car repossessed and then pay off my debt, can I have the repossession removed from my credit? While paying off the debt might improve your credit standing, the repossession can remain on your credit report for up to seven years. However, you can negotiate with your lender about potentially updating the account status or even removing it in some cases.

Are there any alternatives to car repossession that lenders might consider if I’m struggling with payments?

Yes, many lenders offer options like loan extensions, reduced payments, or payment plans. It’s always best to communicate with your lender as soon as you anticipate payment challenges.

Can I dispute a repossession on my credit if I believe it’s inaccurate?

Yes, under the Fair Credit Reporting Act (FCRA), you have the right to dispute credit report errors. If you believe a repossession was inaccurately reported, you can file a dispute with the credit bureaus to have it reviewed.

The Bottom Line With CreditNinja: Car Repossession and Your Credit 

Car repossession can be time-consuming, financially draining, and highly stressful. Save yourself a world of hassle by not breaking your car lease or auto loan contract. If you ever feel like you are in a place where you are unable to make payments, contact your lender immediately. Most lenders may have a solution, such as a new repayment plan, that could help you avoid a missed payment! 

Before taking out a car loan of any kind, it is important that you realize that the lender owns the vehicle until the entire account balance is paid back. And if a borrower fails to pay, they have the right to repo the vehicle. Learn more about car loans, repossession, and personal finance with CreditNinja’s online resources in financial literacy. 


  1. Auto repossessions predicted to rise: what you need to know | Fox 6
  2. How Long Does A Car Repo Stay On Your Credit? | JD Power
Read More
loans like upgrade
Upgrade is a financial institution that offers several products, including personal loans, a few types of rewards credit cards, savings and checking accounts, and credit…
loans like boost finance
If you need a cash loan, you should know that there are many personal loan options similar to Boost Finance. People use personal installment loans…
loans like eloan warehouse
If you’re looking for a loan similar to eLoan Warehouse, you may be dealing with an unexpected expense and need emergency cash. According to a…
loans like moneykey
There are plenty of online loans comparable to MoneyKey when you need fast cash with bad credit.  Unexpected bills can turn up when you least expect…

Quick And Easy Personal Loans Up To $2500*