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Collection accounts stay on your credit report for seven years from the date the original account went past due. They can hurt your credit during this time, making it more difficult to qualify for new loans or credit cards. Paying off the collection account may help, but it won't remove the collection account right away.
When Are Collection Accounts Removed?
A collection account will be automatically removed from your credit report seven years after the original account went delinquent.
The original delinquency date is when your account first became 30 days past due, kicking off the series of missed payments that ended with your account going to collections. That date doesn't change once your account is closed and sent to collections.
Making a payment doesn't reset the timeline for when the account will be deleted from your credit report—although it may reset the statute of limitations on the debt, meaning how long the debt can legally be collected. A collection agency buying your account from another collection agency doesn't reset the timeline either, although you may see a new account open date when the collection agency takes over your account.
Can You Remove Collections Accounts From Your Credit Report?
You can't get a correctly reported collection account removed from your credit report early.
Even if you pay off the debt, the collection account will stay on your credit report for up to seven years. The timeline depends on when your debt first went delinquent, not whether you still owe the money.
However, if you notice an error with the collection account, you can file a dispute with each of the credit bureaus to have the account corrected or removed from your credit reports.
For example, if the collection agency doesn't send an update to the credit bureaus once you've paid off or settled the account, you may want to file a dispute.
If a collection account is removed from your credit reports early, the original account and late payments that led to the collection activity can remain. Those can continue to impact your credit, and the late payments will remain on your report for seven years from the date of first delinquency.
How Do Collections Affect Your Credit Scores?
A collection account is a negative item that can hurt your credit scores. But the impact on your score can depend on the type of credit score and whether you've paid off the collection.
For example, the latest FICO® Score☉ and VantageScore® models ignore paid collection accounts, while previous score versions may count paid collections against you.
But when you're applying for a loan with a lender that uses older scoring models—such as a mortgage lender—paying down your collections could still be important. Credit scores aside, the lender may review your credit history, and having unpaid collections could make it more difficult to qualify. While even paid collection accounts are negative, they may be viewed more positively by lenders than an account that remains unpaid.
Improving Your Credit When You Have Accounts in Collections
In addition to paying off collection accounts, you can take a variety of actions to improve your credit scores while there are collections in your credit history.
For example, if you have open credit cards or loans, make all payments on time going forward. Payment history has the biggest effect on your credit scores, so making at least your minimum payments on time every month will help. If you don't have any open accounts, you may want to take out a secured card or credit-builder loan to start building a positive credit history.
You can also work to lower your utilization rate—an important scoring factor—by paying down credit card balances or consolidating credit card debt with a personal loan.
Having a long history of on-time payments and low debt relative to your available credit limits can help improve your credit over time.
Review Your Credit Reports
You can also review and monitor your credit reports to watch your progress and make sure no unexpected collection accounts show up there. You can get your Experian credit report for free every 30 days, and take advantage of our free credit monitoring service, which can alert you to score changes and suspicious activity. If you find or are notified of something odd, you can use the Experian Dispute Center to submit a dispute online for free.