How Long Does a Repossession Stay on Your Credit Report?

How Long Do Repossession and Voluntary Surrender Stay on Your Credit Report?

A repossession or voluntary surrender stays on your credit report for seven years from the original delinquency date—the date of the first missed payment after which the account was never brought current. After seven years, the account will automatically be removed from your credit report.

Example: You miss your first car loan payment in July 2026, and your car is repossessed in November 2026. The repossession will be added to your credit report in November 2026, but will be removed in July 2033, seven years after the initial missed payment that led to the repo.

Learn more: How Bad Is It to Default on a Car Loan?

How Much Does a Repossession Hurt Your Credit?

A repossession has a serious negative effect on your credit scores. That's because your payment history is the most important factor in your credit scores, and a repossession signifies you failed to repay your auto loan.

Damage to your credit can be compounded by the events that typically surround repossession, including:

• Late payments: Each missed payment before a repossession gets added to your credit report.
• Loan default: Although timelines can vary, a loan more than 90 days past due is typically considered in default, and lenders often repossess the vehicle at this point.
• Charge-off: After seeking payment for four to six months with no success, the lender may write off the debt as a loss. You're still responsible for the charged-off debt.
• Collections: If the lender sells the debt to a collection agency, a new collection account may appear on your credit report.

Each of these derogatory items stays on your credit report for seven years after the first missed payment leading to the repo. The cumulative impact of so many negative items can make it difficult to get credit or rent an apartment. If you are approved, you'll typically pay higher interest rates and fees.

Did you know? Missing a payment is likely to damage your credit more if you had a good credit score to begin with than if your score was already low.

Learn more: How Does Repossession Work?

Voluntary Surrender vs. Repossession

Repossession occurs when the lender takes your vehicle because you have stopped making payments. Voluntary surrender occurs when you give the lender the vehicle because you can't make the payments.

Both voluntary surrender and repossession have a similar negative impact on your credit score. However, some lenders may view a voluntary surrender slightly more favorably because it shows you were willing to work with the lender.

Learn more: Voluntary Surrender vs. Repossession

Can You Remove a Repossession From Your Credit Report?

You cannot remove a repossession from your credit report unless the information is inaccurate. If you believe information related to the repo is inaccurate, contact the lender to see if they can correct or remove it.

If you're not satisfied with the lender's response, you have the right to file a dispute with the credit bureaus on whose credit reports the information appears. You can submit a dispute with Experian and the other consumer credit bureaus online, by mail or by phone. Allow 30 to 45 days for disputes to be investigated and resolved.

Learn more: How to Dispute Credit Report Information

What if You Still Owe a Balance on Your Car Loan?

When your vehicle is repossessed or voluntarily surrendered, the lender sells it to recoup as much of the loan balance as possible. Any remaining balance (known as a deficiency balance) is your responsibility. If you don't pay it, the lender may turn your account over to a collection agency.

If the lender assigns or sells the debt to a collection agency, a collection account may appear on your credit report along with the original auto loan account. The collection account will be removed from your credit report seven years after the original delinquency date—not seven years from when the collection agency receives the account.

Learn more: How Do I Get Out of a Car Loan I Can't Afford?

Will Paying Off a Derogatory Account Help My Credit?

Paying off a derogatory account could help your credit, depending on whether the account has been sold to collections and which credit scoring model is used to calculate your scores.

Many newer credit scoring models exclude collection accounts from the score calculations once they have been paid in full. However, many lenders use older credit scoring models that still consider paid collection accounts.

Paying off a derogatory account that hasn't been sold to collections will result in that debt being updated to show as "paid" on your credit report. Although this won't immediately help your credit score or remove the account from your credit report, it might help your credit recover a bit more quickly over time.

In addition, lenders may view a paid account more favorably than an unpaid one, which could help you qualify for new credit somewhat sooner than if the debt is left unpaid. For instance, when buying a home, many mortgage lenders require outstanding collection accounts or past-due debts be resolved before approving a loan.

Tip: When paying off a derogatory account, be sure you pay the correct creditor. If the account has been sold to collections, you need to pay the collection agency that now owns the debt, not your original lender.

Learn more: How Do I Get a Paid Collection off My Credit Report?

How to Rebuild Your Credit After a Repossession

In addition to paying any balance remaining after the lender auctions your car, there are several other steps you can take to start rebuilding your credit after a repo.

• Bring other past-due accounts current. If there are any other outstanding accounts on your credit report, bring them current as soon as possible.
• Make future payments on time. Your payment history is the most important factor in your credit scores. Setting up autopay can help ensure you don't miss payment due dates.
• Pay down credit card balances. Your credit utilization ratio, or the percentage of available revolving credit you are using, is also a major factor in your credit scores. People with the highest credit scores tend to have credit utilization ratios under 10%.
• Check your credit score. When you get your credit scores for free from Experian, you'll be able to see what is affecting them the most and what you can do to help improve your scores.
• Add positive payments with Experian Boost^®ø. Experian Boost is a free feature that adds your eligible on-time utility, phone, insurance, streaming service and rent payments to your Experian credit report, which could quickly improve your credit scores based on Experian data.

Learn more: Can I Get a Car Loan After a Repossession?

The Bottom Line

If you're having trouble paying your bills, working with a reputable nonprofit credit counseling agency could help. A credit counselor can help you learn to budget and better manage your finances so you can avoid future repossessions.

As you work to rebuild your credit after a repo, consider signing up for free credit monitoring through Experian. You'll be able to track your progress toward improving your credit score and watch your efforts pay off.