How Many Points Does A Repossession Drop Your Credit Score?

How Many Points Does A Repossession Drop Your Credit Score?
How many points does a repossession drop your credit score?

A credit score is a number between 300 and 850 that depicts a consumers’ creditworthiness. The higher the score, the better a borrower looks to potential lenders. 

A credit score is based on credit history; this means the number of open accounts, total levels of debt, repayment history, amount and other factors. 

Lenders will use these credit scores to evaluate the probability that an individual will repay loans in a timely manner. 

On the other hand, a repossession is the term that is used to describe the taking back of a property after a borrower has defaulted on payments.

How many points does a repossession drop your credit score?

In this case, the lender will either repossess the collateral, or they pay a third party service to do so. There are two types of loans; secured and unsecured.

While an unsecured personal loan will allow you to borrow money without providing collateral, a secured loan requires some form of security- basically, they need an assurance that you will pay. 

If you take out a loan on a car, the lender knows that if you fail to make your monthly payments, they can repossess the car and sell it to mitigate the loss. 

Now we understand how this works, we want to discuss how many points on your credit score you will lose if you fail to pay a loan and end up having a property repossessed.

How many points do you lose?

Typically, a repossession will drop your credit score between 50 and 150 points. The repossession will also stay on your credit report for 7 years.

If you speak with the lender, in some cases they may negotiate a deal that does not include your credit being damaged. However, if they should not, repossessions can be removed by companies that specialize in credit  repair and repo removal. 

So what about voluntary repossession. In the case that the repossession is voluntary, your credit score will likely drop by 100 points due to late payments. Since a repossession stays on your credit score for 7 years, this can severely impact your credit score and affect your ability to qualify for loans. 

The exact number that will be taken off your credit score will vary, it depends on the exact circumstances of the repossession, however it has been estimated that a repossession can potentially take off up to 100 or 150 points from your total.

This will be a big blow to your credibility, even if your record was good before that. If your credit scores were low before this, then a repossession will basically obliterate your credit score.

How long do the effects of Repo remain on your record?

Generally, a repossession record and all the associations with it, such as red flags to loaning companies, will stay on your record for around seven years.

This means that unless you take adequate measures to get the repossessions, late payments, collections, and the judgement, if the creditor sues you successfully, off of your records sooner than this, you will either be unable to get any loans at all, or you will get them but at insane interest rates. 

The easiest way to get these repossessions and associations cleared from your credit score record is to work with a credit expert/ credit repair company. However, be mindful that these companies cannot guarantee success as it largely depends on the creditor.

Credit repair companies are usually able to remove repossessions much earlier than usual by convincing the creditor to do so. 

Once the creditor is convinced and the repossession is removed, they can then get to work on other aspects of your credit score that can be removed or improved to raise your overall credit score. 

A good way to prevent all of this, of course, is that if you think you are in danger of losing your car to an auto lender, is to take action from your end before they repossess your vehicle.

Do not avoid calls, but try to find a way to work it out or get a deferment. If you cannot find the funds or a plan to get out of the bind in time, sell the car on your own to get the rest of the money and pay the whole loan off in one go.

Is it possible to get a car loan after a previous repossession?

So, if you have had a previous repossession, you may wonder if you can get a new car loan. It is possible, not entirely off the cards for you, but it will come with limited options, and you can expect high interest rates too.

A repossession will typically drop your credit score by roughly 100 points, severely impacting your credit and staying on your report for 7 years. Depending on the state of your credit score, the options you have will differ.

For example, someone who had a perfect credit score before the repossession may have more options than someone who had a poor to moderate credit score before the repossession. 

Each case is unique. 

How many points will be added to your credit score when a repo is removed?

If you have had a repossession and then the repo is removed, it will take some time for the credit score to be updated as such.

However, it will essentially gain back all points lost due to the repossession, as well as any financial blemishes that we mentioned above. 

Therefore, once your score has been cleaned up, and the repo removed, you can expect your credit score to increase by as much as 100 points after the record of your repossession has been removed from financial history successfully, and the score gets updated with it.


A repossession can be very damaging to your credit score, and it will stay on your record for 7 years unless you get it removed by a professional.

The best way to avoid any tarnishing of your credit score through repossession is to try and avoid the repossession entirely, either by selling the vehicle yourself, or by trying to work it out or get a deferment.

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