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How Long Do Collections Stay on Your Credit Report?

Learning you have an account in collections can be a stressful experience. But don’t ignore it and hope it goes away.

If you have an account in collections, it’s important to know how long it will stay on your credit report. Once you learn the basics, you can make a plan to confidently get back on track:

What are collections?

Bills fall into collections when they’re seriously past due. It can be a sign of financial trouble. But it could also simply be a bill that slipped through the cracks.

Most of the accounts or bills you have can go to collections, including credit cards, utilities and student loans, just to name a few. When a bill is late, a lender may try to collect money for the past-due payments themselves. Or, they may hire or sell your debt to another company to collect the amount due. There’s no set time frame as to when a lender will place a past-due account into collections.

What happens if a bill goes to collections?

If the original company is attempting to collect the debt themselves, the account information will show the phrase “In Collections.” If the creditor sold the unpaid debt to an outside, or third-party, company, that collections company will now be reporting the account to credit reporting agencies. Some accounts that don’t normally show up on your credit reports, like those for phone or utility bills, can appear in collections when an outside collections agency has bought the debt from the original creditor.  

The contact information for the collections agency, along with who they are collecting the debt for, will be listed with the rest of the account information on your credit report. When the collection has been paid, it will say “Paid Collection” in the account information. Credit reports don’t update immediately, but the change should be reflected in your report when the information is provided to the credit reporting agencies by the collections agency. This usually happens once a month.

So, how long will collections stay on your credit report? Collections, like other adverse information, will remain on your credit report for 7 years. A paid collection account will remain on your credit report for 7 years as well. One exception to this rule is medical collection debt, which will be removed when paid in full. Another exception is for residents of New York for which paid collections fall off their credit reports after 5 years. You can see when the collection is estimated to be removed in the information section of the account. The negative effect of collections and missed payments on your credit score tends to lessen over time.

You can’t remove collections from your credit report unless the account doesn’t belong to you or the account is the result of fraud. If you see a collection account on your report you don’t recognize, you can contact the collection agency using the phone number listed on your credit report. They can confirm if the debt belongs to you and provide other relevant information about the account. The Consumer Financial Protection Bureau has sample letters you can use to help guide you if you’re asking for more information from a collector. If you suspect a collection account on your TransUnion credit report is fraudulent, you should report the fraud at identitytheft.gov and dispute it through the TransUnion Service Center.

Managing and preventing collections accounts

Once you learn you have an account in collections, you’ll want to work with the collection agency or the original lender. Ideally you should work to pay off the amount in collections as quickly as possible. But your exact next step depends on your individual situation. The Consumer Financial Protection Bureau provides guidance on negotiating with debt collectors.

After you know where you stand with any collections accounts, you can build a plan to manage your debt and help prevent missed payments in the future. Set up automatic payments, if possible, to help you keep up with bill due dates, especially those that are easy to forget. You may also want to set aside a specific day each month to pay bills and go over your accounts to be sure you don’t see anything unexpected. While going over accounts, check that the contact information you have listed for each of your credit accounts is up to date so you don’t miss any important letters or phone calls.

With a plan, consistent healthy credit habits and time, you can navigate through collections to achieve healthier credit and reach the financial opportunities you deserve. You can learn more about the different sections of your TransUnion credit report and how information impacts your credit health by exploring our guided credit report tool.

Disclaimer: The information posted to this blog was accurate at the time it was initially published. We do not guarantee the accuracy or completeness of the information provided. The information contained in the TransUnion blog is provided for educational purposes only and does not constitute legal or financial advice. You should consult your own attorney or financial adviser regarding your particular situation. For complete details of any product mentioned, visit transunion.com. This site is governed by the TransUnion Interactive privacy policy located here.

What You Need to Know:

The credit scores provided are based on the VantageScore® 3.0 model.  Lenders use a variety of credit scores and are likely to use a credit score different from VantageScore® 3.0 to assess your creditworthiness.

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