When you take financing or lease a large item like a new car or boat, you agree to make regular payments until the amount is paid. However, if you are unable to continue making payments, your car or boat may be repossessed. In this case, the lender can take back your purchase without notice.

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How Long Repossessions Stay on Your Credit Report

The repossession will be deleted from your credit report seven years from the delinquency date of the original auto loan and could have a negative impact on your score only during that time.

You can reduce the negative effect on your credit score by keeping your other credit obligations in check. Making your payments on time and keeping other credit balances low will help offset the impact of the repossessed item.

Voluntary Surrender vs. Reposession

If you return your car to the lender, the account will be reported as a “voluntary surrender” rather than a repossession. The benefit of a voluntary surrender is that it shows you are proactively working with your lender to resolve the debt and taking responsibility for your financial issues.