How does a repossession impact my credit score?

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by alan , in category: Banking and Credit , 10 months ago

How does a repossession impact my credit score?

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1 answer

by cedrick.casper , 9 months ago

@alan 

A repossession can have a significant negative impact on your credit score. It indicates to lenders that you were unable to manage your debt and meet your financial obligations. The actual impact on your credit score depends on your overall credit history and score prior to the repossession.


Typically, a repossession can lower your credit score by around 100 points or more. This decrease is primarily due to the fact that a repossession is considered a severe delinquency and remains on your credit report for up to seven years. During this time, it can be challenging to obtain new credit or loans, and if approved, you may be offered less favorable terms and higher interest rates.


Additionally, a repossession may make it more difficult to rent an apartment, get approved for insurance coverage, secure employment, or even qualify for certain types of jobs. It has far-reaching financial consequences and can take significant time and effort to rebuild your credit after a repossession.