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How a Car Repo Impacts Your Credit Score


Having your car repossessed after missing too many payments can have a substantial impact on your credit rating. While you can stop a repo from occurring, consumers are often too scared or embarrassed, and end up ignoring important calls and letters from the bank. If you want to maintain a strong credit score, you need to take the necessary steps to avoid having your car repossessed. In this blog, we talk about the ways that a car repo can harm your credit score.

Late Payments

Your vehicle can be repossessed by your lender once you default on your loan. Your payments account for 35% of your FICO score. The longer your payments go unpaid, the bigger impact it will have on your overall score. By the time the repo-men come to take your car, you might have at least one 60, 90, or 120-day late payment reported on your credit history.


Car repossessions show up as "current manner of payment" on your credit report. Code 08 refers to a repossession, while code 8A refers to voluntary repossession. A voluntary repossession can hurt your credit just as much as a code 08 repossession. Both forms of repossession will put a bad mark on your credit report.


Once your car has been repossessed, it will likely be sold at auction for much less than what you paid. This means that you will be left on the hook for the difference, in addition to towing and storage fees. If you can’t pay what you owe, your account will be sent to a collection agency. The collection will show up on your credit report and lower your rating.

If you want to avoid a repossession, you should try the following things:

  • Request a deferment on your payments
  • Refinance your car loan
  • Sell your car on your own

Get Help From a Lawyer

Are you facing repossession? Our consumer law attorneys are here to help you protect your rights and interests. We can review the details of your case and discuss all of your legal options when you come in for your free case evaluation.

Call (312) 313-1613 to schedule an appointment with a consumer law attorney in Chicago.