How Long Does a Repo Stay on Your Credit Report?

Repossession on Your Credit Reports

A vehicle repossession stays on your credit reports for up to seven years and can really put a dent in your credit score. Within the first year after the repo, both traditional and subprime lenders may be unwilling to approve you for an auto loan. But the good news is that the impacts of a repo lessen over time.

Repossession is usually the result of a default on a car loan, typically due to missed payments. Some lenders may start the repossession process after you’re only a day late on your car payment. Missed and late payments also remain on your credit reports for up to seven years.

However, credit reports do heal. Over time, the negative impact of a repossession lessens. After 12 months, you have a better chance of qualifying for a car loan if you’ve avoided any other big negative marks on your credit reports after the repo.

Since repossession lowers your credit score, it can make getting a car loan more difficult. You may need to look into alternate loan options than you're used to or work to build your credit before getting another car loan.

If you’re about to face a repossession, talk to your auto lender immediately. You’re at more of an advantage if you haven’t missed any car payments yet, since you can try for a loan deferment, which pauses your payments for a limited period (typically up to three months).

Timeframe for Repossessions

The time it takes for your vehicle to be repossessed after loan default varies, depending on how quickly your lender wants to get the repo process started. Some lenders only wait 24 hours before calling a recovery company to find and repossess your car. Others wait around a month, but again, this varies by lender.

A repo typically appears on your credit reports around 30 days after your vehicle is obtained by the recovery company.

Note that a recovery company, and the lender you're working with don't have to inform you of a pending repo, though in most states you'll receive plenty of written warning. A repossession can happen at any time, from anywhere, so if you're currently trying to hide your car from a repo man, the best advice is to contact your lender to work something out.

Does Voluntary Repossession Stay for Less Time?

A voluntary repossession, where you return the car to the dealership yourself, is still considered a repossession, and won't save you any heartache when it comes to a repo on your credit report. Voluntary repos stay on your credit report for seven years as well.

How Does a Repossession Affect Your Credit Score?

Repossession can do quite a number on your credit reports, but the amount of damage actually depends on how your credit score looked before your repo. The higher your credit score, the farther it has to fall – and it will.

Immediate Credit Score Impact

Typically, a repo can drop your credit score anywhere from 50 to 200 points, and the more credit you have to start, the more it tends to fall. That means if you are already dealing with poor credit, your impact from a repo could be less than that of someone with a higher credit score. This will happen as little as 30 days after your repo is reported to the credit bureaus.

Long-Term Credit Consequences

As for the longer-term consequences, your credit score will bounce back, it will just take some time. Typically it takes a year or two of rebuilding before you see your credit score turn around significantly.

Can I Remove a Repo From My Credit Reports?

To remove something from your credit reports, it almost always needs to be put there by mistake. If you have a repo reported that didn’t happen, then contact the credit bureau reporting the repossession and the creditor that mistakenly reported it.

Removing a mistake from your credit report is done through a dispute. All three major credit reporting agencies allow for online disputing. The credit bureau has 30 days to investigate and may require you to submit proof that the reporting action is incorrect. In the case of a vehicle repo that never happened, it could mean submitting proof that you’re current on the loan and/or still have possession of the vehicle.

Mistakes can happen on credit reports, and it’s more common than you may have guessed. According to a Consumer Reports investigation, about one-third (or 34%) of Americans have at least one mistake on their credit report.

If the vehicle repossession isn’t a mistake, then it’s going to stick around for a while. However, it’s still a good idea to comb through your credit reports and make sure they’re accurate. Now, you can request a copy of your credit reports every week, for free through www.annualcreditreport.com. It used to be more difficult to check your credit reports, but the rule was changed to give people more access after the pandemic.

Getting Another Car Loan After Repossession

There are some dealerships that don’t check your credit reports, so a recent repo wouldn’t impact your ability to qualify for a car loan. Buy here pay here dealers are known for skipping the credit check and may be a good option to explore if you have a repo that’s less than 12 months old.

If your repossession is over a year old, then subprime financing may be another option to check out. Subprime auto lenders are signed up with special finance dealerships, and they assist borrowers with tarnished credit histories. If you can meet their requirements, then your credit score isn’t the most important part of your auto loan eligibility.

Here at Auto Credit Express, we aim to make the car shopping process easier for borrowers with credit challenges. Using our nationwide network of special finance dealerships, we can look for a dealer in your area that has bad credit lending resources. Fill out our free auto loan request form to get started!