Car repossession on your credit report

How a repossession is reported, what a deficiency balance is, and the errors to look for.

How it is reported

Voluntary and involuntary repossessions are both negative. A repossession can stay on your report for seven years from the date you first fell behind.

The deficiency balance

After the lender sells the car, you may still owe the difference between the sale price (plus fees) and what you owed. That deficiency can be sent to collections. State law often requires the lender to notify you before the sale.

Errors to look for

The same deficiency showing as a balance on both the loan and a collection account, a balance that ignores the sale price, or a missing date of first delinquency are worth disputing.

Before it happens

If you are falling behind, call the lender early. Many offer deferrals or modified payment plans, which are usually far less damaging than a repossession.