How Long Before My Collection Account Is Updated?

How Long Do Collection Accounts Stay on Your Credit Report?

A collection account can remain on your credit report for up to seven years from the original delinquency date, even once it has been paid. The original delinquency date is the date of the first missed payment on the credit account that was sold to collections, or the date the account first became delinquent and was never brought current.

In some cases, both the original account and the collection account will appear on your credit report simultaneously. The original account will appear as closed or transferred once it has been sold to collections, but the history of the account remains.

Both the original account and the collection account will be automatically removed from your credit reports at the same time: seven years from the original delinquency date. You can request what's called a goodwill deletion from the debt collector, meaning they agree to remove the collection account from your credit report. This is most likely to be successful if you had temporary difficult circumstances that impeded your ability to pay the debt, or if you previously had a history of on-time payments with that creditor.

Learn more: Why You Should Review Your Credit Reports Regularly

Benefits of Paying Off Collection Accounts

Even though paying off a debt in collections won't immediately erase it from your credit report, there are many other reasons to prioritize paying off the debt. They include:

• Potentially positive credit score impact: The latest versions of the VantageScore^® and FICO^® Score^Θ credit scoring models—VantageScore 3.0 and 4.0 and FICO^® Score 9 and 10, respectively—exclude all paid collection accounts from credit score calculations. That means paying off a collection account could improve your credit scores right away. The FICO^® Score 8, however, the most widely used FICO^® Score version, does not ignore paid collections if the original debt was over $100.
• Better chances at mortgage approval: When buying a home, an unpaid debt in collections is a red flag. Mortgage lenders may require that any past-due collections are paid off or settled in full before they will consider approving you for a loan.
• Preventing or stopping a lawsuit: If you ignore a debt collector, they may sue you to force you to pay the debt, and a court could freeze your bank account, intercept your paycheck or put a lien on your property to get the lender what it's owed. Paying off a collection account prevents this difficult process from taking place.
• Less stress: Paying off an account in collections means you'll no longer be contacted by debt collectors and you'll release the emotional strain of knowing an outstanding debt is out there in your name.

How Else Can I Improve My Credit Scores?

You can improve your credit scores by maintaining positive credit habits and focusing on your payment history and your amounts owed, the two most important factors in credit scores. Even if you've had credit mishaps in the past, take these steps to strengthen your credit starting now:

• Bring your accounts current. If you have any accounts that are past due—say, a late credit card bill—the first step is to bring those accounts current as soon as possible. When you contact a creditor and make a payment, you can also ask them to refund late fees.
• Set up autopay. Next, make sure that all payments are on time going forward. Sign up to make automatic payments from a checking account so that you pay credit card, loan and utility bills by the due date every time.
• Pay down existing balances. After that, focus on your credit card balances. If you are carrying a balance on your credit cards month to month, paying down or paying off those balances can lower your credit utilization rate, or the proportion of your available credit in use, which can improve your credit scores.
• Review your credit reports and scores. You can view your credit report and FICO^® Score for free from Experian, which will give you insight into the risk factors affecting your score. These tell you what specific changes you can make to bolster your score.
• Sign up for Experian Boost^®ø. With this free feature of an Experian account, you could get credit for eligible utility, insurance, cellphone and streaming service payments on your Experian credit report and boost your FICO^® Score 8 based on Experian data right away.
• Opt for a secured credit card. You can also build or rebuild credit with a secured credit card, which requires an initial deposit in the same amount as the credit limit. You won't be at risk of racking up debt, but you will benefit from making on-time payments.
• Apply for a credit-builder loan. Another way to add positive payment history to your credit file is by choosing a credit-builder loan. You'll make monthly payments toward the loan that you can then access in the form of a savings account at the end of the term.

The Bottom Line

Paying off collection accounts is a worthwhile goal, since it can positively affect your credit score and eliminates the possibility of getting sued by debt collectors. It may take up to two months for your credit reports to reflect that the account has been paid off. Monitor your credit regularly as you continue to make moves to improve your credit score, not only to stay on top of what your lenders are reporting, but to help you catch potential fraud sooner.