If your account was sent to collections, you will need to pay the collections agency directly. Once the account is sold or transferred to a collection agency, the collection agency becomes the legal owner of that debt.
Once the debt is paid to the collection agency, the account will be updated to show a status of “paid” on your credit report.
Bringing the account current by paying the collection agency does not mean the negative information will be removed immediately from your credit report. The collection account will still appear in your report, but it will show as a paid collection opposed to an unpaid collection. A paid collection is at least slightly more positive than an unpaid collection.
In fact, the newest credit scores will no longer count a paid collection account in the calculation. So, paying a collection account could have a significant improvement in your credit scores almost right away.
The good news is that the negative information will not remain forever. Negative information, including collection accounts, is deleted seven years from the original delinquency date. The original delinquency date is the date of the first missed payment that led up to the collection status.
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Scoped on: 3/30/2017