Repossession
When a lender reclaims a financed asset (typically a vehicle) after the borrower defaults on loan payments. The lender then sells the asset to recover the debt. Repossession remains on your credit report for seven years and significantly damages your credit score.
Related guides
- Full credit & FICO® glossary
Browse all defined terms by category.
- Auto Loan
An installment loan used to finance the purchase of a vehicle, where the vehicle serves as collateral. If you fail to make payments, the lender can repossess the vehicle. Auto loan interest rates are partly determined by your credit score.
- Default
Failure to repay a debt according to the terms of the loan agreement. Default triggers consequences depending on the loan type — collections activity, repossession, foreclosure, or wage garnishment. Defaulting on any loan severely damages your credit score.
Frequently Asked Questions About Repossession
What does Repossession mean?
When a lender reclaims a financed asset (typically a vehicle) after the borrower defaults on loan payments. The lender then sells the asset to recover the debt. Repossession remains on your credit report for seven years and significantly damages your credit score.
Is Repossession important for my FICO® score?
Understanding Repossession helps you manage your credit profile more effectively, which in turn supports a stronger FICO® score.