Collections on Your Credit Report: What to Do Next

Few things hurt a credit score like a new collection account. It usually shows up after an account goes unpaid for several months and the original creditor hands it (or sells it) to a collection agency. Whether it's an old credit card, a phone bill, or a medical bill, the steps to handle it are similar.

First, make sure the collection is valid

Collection accounts are among the most error-prone items on credit reports. Debts get sold several times, records get lost, and balances grow with fees. Before you pay anything, confirm:

• The debt is actually yours.
• The balance is correct.
• The date of first delinquency is accurate (it controls when the item must come off).
• The same debt isn't showing a balance twice, once from the original creditor and once from the collector.

Request debt validation

Under the Fair Debt Collection Practices Act, a debt collector must send you a validation notice with details about the debt. If you dispute the debt in writing within 30 days of receiving that notice, the collector must stop collection activity until it provides verification. A written debt validation request is a simple, powerful first step, especially with debts that have been sold several times.

Dispute inaccurate collections with the bureaus

If the collection is inaccurate, incomplete or can't be verified, dispute it with Equifax, Experian and TransUnion. If the collector can't verify the information, the bureau must correct or delete it. Our guide on disputing credit report errors walks through the process.

Should you pay a collection?

If the debt is valid, paying it is usually the right move, but how you pay matters:

• Negotiate the amount. Collectors often accept less than the full balance, especially on older debts.
• Get agreements in writing. Before paying, get a letter stating the amount that settles the debt in full.
• Ask about pay-for-delete. Some collectors will agree to request removal of the account in exchange for payment. Not all will, and it's never guaranteed, but it doesn't hurt to ask.
• Never give open access to your bank account. Pay with a method you control.

How collections affect your credit score

Collections are a major negative factor in older FICO models, which many mortgage lenders still use. Newer models like FICO 9 and VantageScore 3.0 and 4.0 ignore paid collections, and treat medical collections more gently. The three bureaus also stopped reporting paid medical collections and medical collections under $500.

Either way, the impact of a collection fades over time, and it must come off your report seven years from the original delinquency. See how long negative items stay on your credit report.

Collections and buying a home

If you're planning to buy a home in Utah, talk to your loan officer before paying collections. Some loan programs require certain collections to be paid; others don't. Paying at the wrong time can sometimes update the account in a way that affects your score temporarily. Read what credit score you need to buy a house in Utah.

How we help with collections

At 90 Day Credit Experts, collections are one of the most common items we dispute. We check each collection for accuracy, duplicate reporting and incorrect dates, and challenge the ones that don't hold up. Start with a free credit assessment.

Frequently asked questions

Can a collection be removed from my credit report?

Inaccurate or unverifiable collections can be removed through the dispute process. Accurate collections can remain for up to seven years from the original delinquency date, though some collectors agree to request deletion as part of a payment agreement.

Will paying a collection raise my credit score?

It depends on the scoring model. Newer models like FICO 9 and VantageScore 3.0 and 4.0 ignore paid collections, so paying can help. Older models may still count paid collections.

What is a debt validation letter?

It's a written request asking a debt collector to verify the debt. If you send it within 30 days of the collector's validation notice, the collector must pause collection until it verifies the debt.

Do medical collections affect my credit?

Paid medical collections and medical collections under $500 are no longer reported by the major bureaus. Other medical collections may still appear.