How does a repo impact a person’s credit score, and how long does it take to recover?

How Long Before a Repo Falls Off Credit?

If you are someone who has had a car repossessed or voluntarily surrendered it, you might be wondering how long it will affect your credit score. A repo is a devastating experience for any consumer, but the good news is that it won’t stay on your credit report forever. The length of time that it remains on your report depends on the type of repo you have and the credit bureau reporting it.

Voluntary Repossession

If you have voluntarily surrendered your car, it will be reported to the credit bureaus as a voluntary repossession. Depending on the credit bureau, a voluntary repo will stay on your credit report for up to seven years. This can negatively impact your credit score, as lenders will see that you didn’t fulfill your financial obligation. However, the impact of a voluntary repo will lessen over time, as long as you maintain positive credit activity.

Involuntary Repossession

If your car was repossessed by your lender, it will be reported as an involuntary repossession. This type of repo will also stay on your credit report for up to seven years, depending on the credit bureau. Similar to a voluntary repo, this will have a negative impact on your credit score, but the impact will lessen over time.

How to Improve Your Credit Score

If you have a repo on your credit report, don’t be discouraged. There are steps you can take to improve your credit score over time:

• Pay all your bills on time.
• Keep your credit card balances low.
• Establish a positive payment history by paying off any outstanding debts.
• Apply for a secured credit card to help rebuild your credit.

It’s important to understand that a repo won’t stay on your credit report forever. As long as you take steps to establish positive credit activity, you can rebuild your credit score and move on from the experience.

Conclusion

If you have had a car repossessed, you might be worried about how long it will affect your credit score. The good news is that it won’t stay on your report forever. Depending on the type of repo, it will remain on your credit report for up to seven years. While having a repo on your credit report can be detrimental, taking steps to establish positive credit activity can help rebuild your credit score and move on from the experience.