Missed payments: Before repossession happens, you would have had missed loan payments. Each missed payment is reported to credit bureaus, which deteriorates your payment history.
Credit score drop: The act of repossession reflects negatively on your credit score, and the credit score can significantly decrease (often by over 100 points).
Public record: Repossessions stay on your credit report for seven years, which impacts new credit applications.
Collateral impact: If you still owe money on your car after it is sold at auction, the debt can be reported to the credit bureau as a deficiency balance, further impacting your credit score.
Future financing complications: Getting another loan or credit card can become more challenging because lenders consider repossession as a risky behavior. You might have to pay higher interest rates or a larger down payment for future loans.
Rental housing issues: Landlords may check credit scores as part of their tenant screening process, and a low credit score due to repossession could make it harder to find rental housing.
