The effects of a repossession

A repossession occurs when a lender takes back the product because repayments haven’t been made. This is most commonly seen when a mortgage lender repossesses a property due to missed mortgage payments. They’ll then sell it to recover the amount owed.

This is usually a last resort, where all efforts to agree on repayment haven’t worked. Because of the nature of repossession, you’ll likely be seen as a high risk, so your score and your ability to get credit will be affected.

The repossession will stay on your credit report for six years, and you’ll need to let future lenders know that you’ve had a repossession before.

While it’s a setback, keep in mind that there are steps you can take now to get on the path to better credit health in the future. Setting goals, as simple as building positive payment behaviours, will get you where you need to be when the repossession drops off. If you feel like you’re struggling, there are resources that can help.