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UPDATED: October 13, 2022

Owing money can be extremely stressful, especially if your account has gone to collections. You’ll keep getting calls and receiving collection notices from them regularly, which can be both frustrating and infuriating.

You might think to pay it off so they would stop harassing you. And you also hope that getting a collection deleted from your record will help improve your credit score. How many points will your credit score increase if a collection is deleted? Up to 150 points if that’s the only collection in your report, or none at all if you still have others that aren’t paid and deleted.

What is a Collection Account?

When you fail to make payments, your creditor will call or send you letters to remind you of your debt. Collections happen if you haven’t paid your bill for 90 days or more. The creditor may decide to sell your account to a debt buyer or transfer it to a collection agency. Once this happens, you still have to make payments.

But this time, you won’t be dealing with the original creditor but the debt buyer or the collections agency. Some debt collectors are persistent, but they still have to respect your rights. If you believe you’re being harassed, know what your rights are by checking out the Federal Trade Commission’s website.

Any type of debt can go into collections, including credit card loans, student loans, guaranteed no credit check loans and car loans. Generally, you’ll know if your account has been moved to the collection because the debt collector will get in touch with you. But the best way to verify if you have one is to check your credit report by getting a copy from the three national credit bureaus: Experian, TransUnion, and Equifax. You are entitled to receive one free copy each year.

How Do Collection Accounts Affect my Credit Score?

According to the Fair Credit Reporting Act, collection accounts stay on your credit report for up to seven years from your first delinquency on the original debt. When calculating your FICO Score, collections fall under the payment history, which accounts for 35% of your credit score.

Not only will you have a lower credit score, but the presence of this negative information in your credit report will also influence other lender’s decisions, especially if you applied for a loan. Even if you get approved, you’ll have to pay higher interest rates compared to those who have no collections on their report.

Likewise, the presence of collection accounts on your credit report can negatively affect your job search. It may even make it harder for you to secure a tenancy approval since landlords and property owners consider collection accounts as red flags for rental applicants.

Does the Amount or Number of Collections Affect Your Score?

No, the balance amount of collections won’t affect your credit score. The number of collections on your report doesn’t necessarily affect the score either. What matters is how recent the collections are, so you may not see improvements in your score if you managed to remove an older account instead of a more recent one. That said, it’s better to tackle the most recent ones first. The older the collections account, the lesser its weight in the eyes of the creditors.

The credit scoring models used by FICO and VantageScore agree that unpaid debt will hurt your credit score while paid debt collections don’t. The latter may not improve your credit score, but it won’t cause further damage either. Collection accounts, regardless of the amount or number, are viewed by lenders and creditors as red flags. But if you managed to pay off your collection debt, they may look at your report with less disfavor than one with unpaid collection accounts.

How to Get Collections Deleted?

Under the FCRA, collection accounts appear on your credit report for 7 years. Even if you have paid your debt, the collection agency or the credit reporting company is not required to remove the collection account. It will only be removed once it goes past the 7-year limit.

However, you can ask collections to be removed from your credit report under two situations:

  • If the collection account in your credit report is inaccurate
  • It stayed on your report longer than 7 years from the original delinquency date

In any case, you have to file a dispute with the credit reporting agency and have it deleted. Will a deleted collection increase credit score? Yes, provided that the deletion resulted from these two scenarios and that’s the only collection account on your record. No, if you have multiple collections but only managed to delete one.

Another option is “pay for delete,” which involves paying off your debt to the collection agency in exchange for taking off the collections account from your credit report. Some deemed this option as unethical since creditors are required to report accurate and complete information to the credit reporting companies.

But it’s legal under the FCRA and the debt collections agencies are the ones to request the removal from the credit reporting bureaus. What you need to note is that this option may not remove the information reported by the original creditors, who may argue that their contract with the collections agencies doesn’t include it.

Deletion of Collections vs Paying Off Collections: What is the Difference and Which is Better?

The deletion of collections means the accounts no longer appear on your credit report. That can happen when you’ve successfully disputed a reporting error or when it has reached the 7 years limitation.

Meanwhile, once you pay off your collection debts, the collection accounts will reflect a zero balance, but they remain on the report. The current version of FICO®'s credit score, FICO® 9, and VantageScore® credit scores 3.0 and 4.0 won’t factor in collection accounts with zero balance. This could lead to an improved credit score. However, some creditors or lenders still use the older models, which consider paid collections and that means there will be no improvements to your credit score despite having paid off your debt.

One of the benefits of paying off collection accounts is a stop to the letters and phone calls you constantly receive from your debt collectors. Plus, you won’t give your collection agency a reason to sue you.

You are probably wondering, how many points will my credit score increase when I pay off collections? Unfortunately, paid collections don’t automatically mean an increase in credit score. But if you managed to get the accounts deleted on your report, you can see up to 150 points increase.

How to Dispute Incorrect Records?

Checking your credit report annually by requesting a free copy of your credit report is important in building, repairing, or maintaining your credit score. Review it regularly to make sure that all the information it contains is accurate. In case you spot any inaccuracies, you have to file a dispute right away.

Send a dispute letter and copies of documents that support your claim to the credit reporting bureau. Under the FCRA, the credit bureaus have to correct incomplete or inaccurate information in your credit report. So, they have to conduct an investigation within 30 days about your claim and get back to you with the results.

The credit reporting agency will loop in the company that provided the information about your reported inaccuracy. The latter will review your complaint and report back to the credit reporting company. If the item is indeed incorrect, all credit reporting agencies will be informed so necessary corrections can be made. After that, you should no longer see the incorrect item in your credit report.

What are the Other Ways to Improve Your Credit Score?

Collection accounts will have less impact on your credit score as they age. Even if they still appear on your credit report, there are other ways to improve your credit score.

  • Always check your credit report for inaccuracies. File a dispute right away once you see an error and provide the necessary documents to support your claim. This will let you fix your credit report before it causes damages to your financial situation.
  • Avoid adding negative items to your credit score by paying off your debt on time. Making timely payments prevents debts from going into default, which means your lenders or credits don’t need to tap collection agencies.
  • Keep your credit card debt as low as possible. Always remember that your credit utilization ratio will be factored in once your credit score is calculated.
  • Apply for new credit only when you need it. Applying for new credit results in a hard inquiry, which could bring down your credit score.

What are the New Models of Scoring and How Does it Affect Your Credit Score?

Fair Isaac Corp. (FICO) and VantageScore are the leading credit scoring companies in the US. Although they both provide credit scores that lenders and creditors use to evaluate loan applicants, they use different processes and criteria when calculating the scores.

VantageScore released its first credit scoring model in 2006. Its most recent version is 4.0, which was launched in 2017. Meanwhile, FICO’s first base scoring model was developed back in 1989 but the latest version is FICO Score 9, which was launched in 2014.

Aside from credit score consistency and payment history, VantageScore 4.0 adds a few more factors to their credit scoring model. It added trended credit data and negative data suppression. Trended credit data shows your credit behavior and tradeline over the past 24 months, including your credit balances, limits, payments, and so on. Negative data suppression refers to the removal of negative items on your credit report. VantageScore 4.0 also uses machine learning technology for consumers with limited credit histories.

Several adjustments were made to the current credit scoring model used by FICO. Under FICO 9, unpaid medical bills won’t affect your credit score that much compared to non-medical debts. It has also made some changes to how it treats paid collections.

Under the new credit scoring system, all paid collections will be disregarded and will not be considered when calculating your FICO score, although it will still appear on your credit report. Rental payments are also taken into account when calculating your credit score.

A new scoring model, FICO Score 10 Suite, is expected to roll out before the end of 2020. Older FICO credit scoring models take into account five major factors:

  • Payment history
  • Credit utilization
  • Credit history length
  • Credit mix
  • New credit

Aside from these five factors, the FICO® 10 T will consider trended data or time-series data, which offers a preview of your financial activities and situation in the past 24 months. Unlike the older models, late payments and credit utilization will have a more significant impact on the credit score. To take advantage of these, you must pay your bills on time and reduce your credit utilization.


Collection accounts are items that creditors and lenders don’t want to see in a credit report. And nobody wants to be in debt or be constantly pursued and harassed by collectors. Having unpaid collection accounts will hurt your credit score, so it’s better to pay off your collection debt or have them removed if possible. Find ways, which include our examples above, to avoid causing further damage to your credit standing too.

Have you been stressed out because of debt collectors? What steps have you taken? Share with us below how it’s been for you.