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How badly does a car repo affect your credit?
My car just got repoed. How badly is this going to hurt my credit?
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
A car repossession, or repo, is going to have a serious negative effect on your credit—but the damage isn’t irreversible or permanent.
Repossession and the related consequences will usually stay on your credit for about seven years from the day the loan went into default. It’s hard to say exactly how much your score will drop since it depends on your specific situation, but it’s likely the drop will be substantial.
Here are a few parts of the repossession process that will likely impact your credit:
- Late payments: There will be a negative item on your credit report for every month that you miss a payment.
- Collections: If you’re upside down on your loan or simply can’t make the payments, your account could be sent to collections.
- Car loan defaults: Your credit will take a hit if you stop making payments and your loan goes into default.
- Court judgments: Any unsuccessful collections on your record may lead to a decision in court.
View full answer
- Gregory R.
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