Credit Advice

Difference between a voluntary surrender and repossession


Have a question?

Do you have a question about consumer credit? You may find an immediate answer by using the search engine. If you can't find what you're looking for, please fill out the form, being as specific as possible.

Please note: The Ask Experian team cannot respond to each question individually. However, if your question is of interest to a wide audience of consumers, the Experian team will include it in a future column.

Our policies
The information contained in this column if for educational purposes only and is not legal advice. You should consult your own attorney or seek specific advice from a legal professional regarding your particular situation.

Please understand that Experian policies change over time. Column responses reflect Experian policy at the time of writing. While maintained for your information, archived responses may not reflect current Experian policy.

Credit Advice

Difference between a voluntary surrender and repossession

Dear Experian,

If I voluntarily surrender my car to the financial institution carrying the loan, will it make a difference on my credit report? Or, is it a repossession no matter how it is repossessed?


Dear HAN,

Returning the car to the lender will result in the account being reported as a “voluntary surrender” rather than as a “repossession.” However, the difference will likely be minimal in terms of the negative effect on your credit scores.

Whether you return the car yourself or a repossession company is sent to get it, you are not repaying the debt as agreed. In the end, that is what lenders look at and what hurts credit scores.

The benefit to a voluntary surrender is that you are proactively working with your lender to resolve the debt. Although you are returning the car, you are taking responsibility for your financial issues and trying to work with the lender rather than forcing it to take an action nobody wants.

By working with your lender, you are maintaining a more positive relationship. Because you aren’t completely burning that bridge, the lender may be willing to extend credit to you much sooner after your financial challenges are resolved. 

However, you must realize that you will be viewed as high risk and will likely pay a much higher interest rate if you can get approved for a new loan at all.

Thanks for asking.

- The "Ask Experian" team

  • © 2016 Experian Information Solutions, Inc. All rights reserved.