by 
The Curious Bag
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When you finance a vehicle, you agree to make the payments to your lender on time every month. If you do not keep up with your payment obligations, your lender can repossess your car. A repossession damages your credit score.
Facts
A repossession always has a negative effect on your credit score. The negative effect, however, varies depending on how high your credit was before the vehicle was seized. The higher your original credit score, the lower you can expect it to drop after your car is repossessed.
Time Frame
Evidence of a repossession remains on your credit report for seven years.
Features
Your payment history on your debts accounts for 35 percent of your credit score. Because of this, any late payments you made prior to the repossession can hurt your credit score as much or more than the actual repossession.
Considerations
Automobile lenders often use a separate credit scoring system that places a greater emphasis on past vehicle loans. This can make it challenging to secure financing for another car in the near future.
Warning
If you owed more on the car than it was worth, your lender may sue you for the remaining balance on the car after it is repossessed and sold. The subsequent court judgment has a significant negative effect on your credit score.
Source:
Cardreport: The Fair Credit Reporting Act (section 605)
MyFICO.com: What's In Your FICO Score?
American Chronicle: A Secret Credit Score Your Car Dealer Won't Tell You About
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