How To Remove A Repossession From Your Credit Report

Updated: Feb. 9, 2019 


If you're trying to get a repossession removed from your credit report to help repair your credit, you basically have three options:

  • 1
    Negotiate your payment terms with the lender. If you can convince the lender that you're capable of making on-time payments with a lower monthly cost, they may give you a second chance. Easier said than done.
  • 2
    File a dispute to get it removed. If you think the repossession was reported in error, or inaccurate in some way, you could request that the credit bureaus remove it from your report.
  • 3
    Hire a credit repair company to do it for you. If you hire out for help, a credit repair company can use their expertise and resources to try and remove it for you, though there are no guarantees, and it will cost you a fee.

Let's walk through each of these options so you can decide on the best recourse for your specific situation.

3 ways to get a repossession removed

Here are three different options you can try to get that repossession taken off your credit report:

1. Negotiate your payment terms with the lender

If they're feeling generous, the lender can allow you to negotiate the payment terms anew so that you can continue with your payments. 

You will have to convince them to allow you to retain the car and maybe reduce the monthly payments so that you pay for an extended time. 

If they want your business enough and feel like giving you a second chance, they can contact the credit bureaus and remove the repossession from your report. 

Just be sure to get any guarantees in writing, so you can dispute the entry if you find it hanging around your report later on.

Here's a good guide on how to negotiate a term loan in more specific detail.

2. File a dispute to get it removed

If you believe the repossession on your credit report is inaccurate or incorrect, you can file a dispute with the credit bureaus to have it removed. This involves writing a letter and mailing it to the bureaus via certified mail.

If the lender cannot prove that it’s valid or fails to respond within 30 days, it will be removed from the report.

We have an entire guide that walks you through how to dispute an error on your credit report

3. Hire a credit repair company to do it for you

If you don't feel like negotiating with lenders or filing paperwork with the credit bureaus, you can hire a credit repair company to do all the work for you. They'll likely end up following many of the same steps and using the same techniques, but they do have the experience and resources that you likely don't have, which may work to your advantage.

Just know that there's no guarantee they'll be able to get the repossession removed, and that it will cost you a fee, around $69-$99 per month.

What is a repossession, anyway?

If you've ever fallen behind on your car payment for too long, you probably know what a repossession is—it's when the car lender takes back possession of the car, sometimes without your permission or a court order, because of those missed payments. 

What gives the lender the right to seize your car?

Well, when you signed up for your car loan, you might remember signing a lot of paperwork that contained certain terms and conditions—and one of those conditions gives the car lender the legal right to repossess your car if you fail to make your payments.

It's important to know that these creditor's don't have carte blanche authority, however—most states have laws that govern how your creditor may repossess the vehicle, so it might be worth contacting your state Attorney General if you feel you've been mistreated.

What does the repossession process look like?

Did you know there are actually two types of repossessions?

One is "voluntary" and the other is "involuntary".

A voluntary repossession is when you proactively give your car back to the lender because you can no longer make the payments.

But the much more common type, and the focus of this guide—involuntary repossession—is when the lender comes to take the car back.

The process for an involuntary repossession is relatively straightforward and generally looks like this:

  • 1
    You default on your loan or lease. Once you fail to make a payment, the repossession process begins and the lender is typically within their rights to take action to get the car back.
  • 2
    The lender comes to take the car back. Once you've defaulted, most states allow the lender to seize the car, without notice or your consent. They will usually take any documents or signed contracts with them as evidence. 

That's pretty much the entire process, but there are a few important details to remember as a consumer:

  • When seizing the vehicle, the lender may not commit a "breach of peace"—no physical force or even threats of force are permitted.
  • If your creditor agreed to change your payment date at any time during your loan, the original contract may be invalid—just make sure you have the change in writing.

How to spot a repossession on your credit report

Repossessions are typically listed under the public records section of your credit report. 

For example, on the Experian credit report, they give you a snapshot of your record right at the top—in this example, you can see there are zero public records, but if you have a repossession, it would likely appear here:

If you're unsure how to read over your credit report and things you should look for, you can check out our guide on how to read your credit report

Don't have a copy of your credit report yet? You can get them for free in less than ten minutes:

Note that both voluntary and involuntary repossessions will appear on your credit report—so just know you don't get a pass if you decide to voluntarily give up your car.

How long does it take a repossession to come off my credit report?

If you don't do anything about it and just leave it b, a repossession a repossession will stay on your credit report for seven years.

Obviously, this is a situation you want to avoid because having a repossession on your report that long will ding your credit score the entire time. That's why we recommend trying one (or all three) of the options we mentioned earlier. 

How will a repossession affect my credit score?

There are literally dozens of unique factors that go into calculating your credit score, so it's hard to pinpoint exactly how a repossession will affect it—just know that it will likely be significant. 

What's even worse than the repossession itself are all the missed payments leading up to it.

Think about it: for your car to get repossessed in the first place, it was because you had failed to make one or more payments—and payment history is the most important factor when it comes to calculating your credit score. And so all of those missed payments were destroying your score the entire time. The repossession listing was just the icing on top, so to speak.

Worse still, the lender could decide to chase you in court to get a deficiency judgment for the outstanding balance, and the collection related to the judgment will also show up on your report and ding your score.

So, while it's difficult to know exactly how many points your score will drop, do know the consequences of a repossession are not to be taken lightly. 

Can I get a car loan after a repossession?

Let's put it this way: if you do find a lender willing to take a shot on you by giving you a car loan while you have a repossession on your credit report, the interest rates they'll offer you will be astronomical. 

The best approach, all things considered, is to deal with the repossession first to get it removed before trying to get a loan for another car.

How to prevent repossessions in the future

The easy answer here is that to prevent your car from getting repossessed again down the line, you just need to pay your car loan on time. And that is true.

But the deeper issue here is probably your budget or your income or some combination of the two. Because at the end of the day, when you go late on paying off a debt, it's either because you're spending more money than you take in, or you're simply not making enough money to finance your lifestyle—or likely both.

Here are some tips for making sure you don't find yourself in this situation again: 

  • Only take on a monthly payment you can reasonably afford.
  • Make sure to include a line item in your monthly budget for your car loan.
  • If you find yourself falling behind on payment, try to restructure the loan with the lender—some of them may be understanding.
  • If you can't restructure the loan, return the car and pay off any outstanding debt as soon as possible

Are co-signers responsible for a repossession?

If you got someone to co-sign on your car loan and the car gets repossessed, they could be on the hook for the remainder of the loan amount.

The co-signer does have some legal rights in the case of the original borrower not being able to pay off the loan—here's a good guide that walks you through co-signers and repossessions.

Wrapping up

Let's face it: no one wants to get their car repossessed and have their credit score damaged as a result.

You do have a few options when it comes to getting a repossession removed from your credit report—a credit repair company will be the fastest, easiest choice, though it will cost some cash.

If you want to go the DIY route, you can try either negotiating with your lender, or disputing the item with the credit bureaus. 

About the Author


Mike Pearson

Mike is a recognized credit expert and founder of Credit Takeoff. His credit advice has been featured in Investopedia,, Bankrate, Huffpost, The Simple Dollar, Reader's Digest, LendingTree, and Quickbooks. Read more.

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