Collection Accounts-if I pay it will be get deleted?
Outside of bankruptcy and foreclosure, arguably the biggest black eye that you can have on your credit report is a delinquent debt that went to collection accounts. These accounts are some sort of debt that you fell behind on, then just let escalate to the point where a debt collector took it over. Collection accounts can cause your credit score to take a huge hit. Worst of all, they can stay on your credit report up to seven years from the time you fell behind on payments. But if you pay off the delinquent account, it will be removed from your credit report, right?
Wrong. This is a common misconception that many people have. But regardless, it’s still crucial to settle any outstanding accounts that have gone to collections. We’ll explain why in this post.
So What Good Is Paying Off A Collection Then?
We know what you’re thinking – if settling a collection account won’t get it removed from your credit report, then what good is it to settle it? Settling is important for two reasons:
- It prevents you from potentially being sued by the debt collector, which can result in the court ordering wage garnishment, putting a lien on your properties or freezing your bank account until the debt is settled. Lawsuits are headaches that you don’t want to have to deal with, trust us.
- Settling a debt can actually help your credit score over time. That’s right, while the collection account may stay on your report for up to seven years, the account will be marked as paid. As this information on your credit report gets older – and you maintain good consumer habits – your credit score will gradually improve the closer you get to that magic seven-year mark.
Is There Anything I Can Do To Get It Removed?
Yes, but you must know that in the end it’s still likely that the collection account – even if it’s paid – remains on your credit report. If you really want to do your due diligence and kick the tires on every option to get collection accounts removed, contact a qualified credit repair company to help you in your cause. These sorts of companies have the know-how and expertise to work with both the credit bureaus and creditors themselves to permanently remove paid delinquent accounts – and well before the seven-year removal period.
The best way to have collections removed from your credit report is to make sure that you never have an account go to collections in the first place. Do this by making smart borrowing decisions, paying all of your bills on time and practicing good debt and financial management techniques.