How Long Do Collection Agencies Have to Collect a Debt?

Woman looking at bills and receipts on floor
Dear Experian,

What is the time frame that collections agencies can go after their money?

- TRA

Dear TRA,

At a national level, there is no set time frame for how long a collection agency can pursue repayment of a debt, but some states have laws that limit how long they can try to collect. Because of this, the statute of limitations, which refers to the amount of time a creditor or collection agency can legally try to collect the money owed, may vary by state. This is governed by the Federal Debt Collections Practices Act (FDCPA) and state laws, and it does not affect how long the account will remain on your credit report. The Fair Credit Reporting Act (FCRA) governs how long information can remain in a credit report.

In some states, the statute of limitations on collecting a debt may be longer than the amount of time it can remain on a person's credit report. Because of this, you may find that the creditor is still trying to collect the debt even after it has dropped off your credit reports.

How Long Can A Collection Remain on Your Report?

When a debt is sold to a collection agency, both the original account and the new account with the collection company may appear on your credit report. The collection account may show an open date indicating when they purchased the debt, but that date has no impact on how long it will remain on your report.

Collection accounts are deleted from your credit history seven years from the original delinquency date of the original account that you failed to pay as agreed. So, you won't be plagued by the collection account in your credit history forever.

In theory, and in states where it's allowed, a collection agency could attempt to get payment from you forever; but in practice, that usually doesn't happen. Eventually, the collection efforts will cost more than any payment they might receive, so it doesn't make business sense to continue to try to collect the debt.

Those efforts can continue for long after the debt has been deleted from your credit history, though, so it is best to repay the debt if you can.

Benefits of Paying Off a Collection Account

Some lenders, such as mortgage lenders, will require you to pay off any past-due debts before they will consider you for new credit.

And, while a paid collection account may remain on your credit report, some newer credit scoring models exclude collection accounts from your score calculation once they are paid in full. This means your credit scores could see improvement right away.

Rebuilding Your Credit Scores After a Collection

Making payments on time is the key to having good credit, so a serious delinquency like a collection account will typically have a significant negative impact on scores. However, there are steps you can take to begin rebuilding your credit:

  • Make sure all past-due accounts are brought current. This includes collections and charge-offs. Take special care to ensure all payments are made on time going forward.
  • Pay down your credit card debt. High credit card balances can have a negative impact on scores, so paying them down—or off—can help improve scores.
  • Order your free credit score from Experian. Your score will come with a list of credit score risk factors that you can use to determine what changes you can make to help your scores improve over time.
  • Sign up for Experian Boost . This free service allows you to add your positive cellphone, utility and streaming service payments to your Experian credit report.

Thanks for asking.

Jennifer White, Consumer Education Specialist

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