Any account that gets sent to collections will take a toll on your credit score. With that said, no derogatory mark can last forever. Most accounts in collections will stay on your credit report for 7 years, but this can vary.

There are certain issues that may change the actual 7 year mark. It is also important to know how to remove these marks sooner rather than later, if possible.

With that said, there are also a lot of other negative credit marks often associated with a collections account, starting with the first late payment, the original charged-off account, and then the final collection account. These will all contribute towards lowering your credit score.

If you do not pay a credit line, medical bill, or other outstanding balance for multiple months in a row (typically around 6 months), the company you owe the money to may write off your debt as a loss and sell the debt to a collection agency. On your credit report, this appears as a charge off, which is a negative mark that lenders use to help them identify people who may not be creditworthy. Most companies issue a charge off after 180 days (6 months) of nonpayment, but it is not a hard and fast rule.

If you continue to neglect your payments, the negative remark from the charged-off account will stay on your credit report for seven years from the original delinquent date (often referred to as the Date of Original Delinquency).

The new collection account will also count against you for up to seven years as well. Any late and delinquent payment remarks on your credit will also remain and negatively impact your score, and will also disappear after seven years.

Bottom line: Collection accounts will greatly affect your credit score. The negative remark from the collection account usually remains on your credit report for 7 years from the start of your original missed payment.

Are You Responsible for the Original Charged Off Account?

Having a charged-off account means you are no longer paying the original company, but instead a new entity that specializes in getting money back from you. Some people mistakenly believe that this means they are no longer responsible for paying off the debt.

However, just because the debt has changed hands does not mean it cannot affect you. You are still completely responsible for paying off the debt, no matter how many times it changes hands.

Once the original creditor has sold off your debt, this charged off account can still cause significant harm to your credit score. Paying off the debt will slightly reduce the effect it has on your credit, but a charged off account can be a glaring blemish on your credit report.

Additionally, a new collection account is opened on your credit report for the new owner of the debt. Continuing to avoid payment can lead to even more marks against your credit as this new account can also report your delinquency. If you are trying to repair your credit score, settle any and all charged off or collections accounts.

Does the Type of Debt You Owe Make a Difference?

Most of the time, the type of debt does not matter to a collection agency. They will treat a mortgage the same as a line of credit, with little difference in collecting or reporting. In these cases again, the collection account will stay on the credit report for 7 years.

There is one slight difference here in that medical collections are treated slightly differently. This has a lot to do with insurance payments.

In some cases, the medical debt goes directly to the person, who then has to send it off to their insurance company to get the cost covered. This process can take time, so most medical debts have a bit of leeway before they are reported to collections.

In most cases, medical debts will not be reported as delinquent until after a 180-day waiting period to allow the person’s insurance company to issue their payments. Also, if a medical account goes to collections, and is then paid by insurance at a later date, the agency must remove the collections account from the person’s credit history.

Removing an Account in Collections

Making payments on an account in collections is an option, but usually does not affect how long that account will stay on your credit report. Even if you pay off the entire balance in collections, the closed collection account will stay on your credit report and still harm your credit score.

However, you may be able to negotiate with the collection agency to remove the derogatory mark from your credit report in return for you paying off the balance. This can take some extra work on your end however. If you do pursue this route, be sure to get an agreement in writing before you pay off your collection.

In some cases it is also possible to dispute a wrongful collection account and have it removed form your credit report. This is mainly for mistakes made by the collection agency or original lender, however many debt collectors have poor records and are not able to validate the debt in the event of it being disputed.

Debt collectors have specific rules and guidelines they must follow by law, and if they fail to meet certain criteria then they are required by law to remove the collection from your credit report.

Some debt collection agencies may also engage in some shady practices that border on violation, such as trying to collect on an account that is no longer theirs. Anyone who suspects they are being treated unfairly should seek legal help or dispute the debt with the credit bureaus.

Final Note

An account in collections can have long lasting effects on your credit score, and these negative marks can last for seven years. The other charges that come along with it are also a headache to deal with. As payment history is so important for your credit score, it is important to avoid collections or to pay them off as quickly as possible.

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