How Long Do Collections Stay on Your Credit Report?

No one wants debt to end up in collections, but if you have medical or other debt that has gone to collections, it won’t affect your credit report forever. Usually, collections stay on your credit report for seven years. The type of debt makes a difference. Medical debt in collections is weighed less heavily than other debt in collections. How long do collections stay on your credit report? It varies by credit scoring system. Keep reading to see how you can get personalized offers from our trusted partners through MoneyLion!

Table of contents

• How collections on a credit report work

• Factors that affect how long collections stay on your credit report

• What are the implications of collections on credit reports?

• How different credit score models deal with collections

• How to dispute a collection with a credit reporting agency

• Tips for maintaining good credit and avoiding collections

How collections on a credit report work

If an account is significantly past due, the creditor can turn it over to a collection agency or an internal collection department. In either case, once the account is passed on to a collection agency, it will be reported as a separate account on your credit report. Credit cards and medical debt are the most common types of accounts that can go to collections. 

If the debt is valid and correct, collections stay on a credit report for seven years after the missed payment. If the debt is not correct or has already been paid in full, you can dispute it and request that it be removed from your credit report. 

Factors that affect how long collections stay on your credit report

How long collections can stay on your credit report depends on various factors. Generally, collections stay on credit reports for seven years from the delinquency date. Here are the factors to consider when understanding your credit report. 

The date of delinquency

The date of delinquency is the date an account is no longer current or the date of the first missed payment. 

The date of the first missed payment

The date of the first missed payment is considered the date of delinquency if you don’t make subsequent payments. If you make payments after your first missed payment but miss another payment, those collections will stay on the credit report both times the account was delinquent. Each will drop off your credit report seven years after the missed payment. 

The type of debt

The type of debt matters. Medical debt may be treated differently. Since July 1, 2022, medical collection debt that’s been paid off won’t appear on your credit reports. Under some credit scoring systems, even unpaid medical debt doesn’t have the same impact on your credit score as other debt. For example, VantageScore® 3.0 and 4.0 models don’t consider medical collections for credit score calculations as of January 2023. Not having medical collections staying on credit reports is great news for consumers struggling with medical debt. 

What are the implications of collections on credit reports?

A collections account can have significant impacts:

• Negative impact on credit score****s: Your score will likely drop significantly.

• Difficulty in obtaining credit or loans: Lenders may be hesitant to give you additional credit. 

• Higher interest rates on loans: Because lenders may see you as high-risk, you’ll possibly be stuck with higher interest.

• Potential for employment and rental application rejections: If you have a significantly low credit score, landlords and employers might turn you away.

To help improve your credit score (or keep it high), you’ll want to do whatever you can to avoid having a collection on your report.

How different credit score models deal with collections

Lenders use four different credit scoring models to calculate your credit score. Two are versions of VantageScore, and two are versions of the FICO score. In all cases, paid medical debt will be removed from a credit report. 

Unpaid medical debt won’t show up on credit reports until one year after it’s due, giving you more time to pay it off without hurting your credit score. And all three credit bureaus will no longer include medical bill collection accounts with balances under $500 on credit reports.

Here’s how each credit scoring model treats collections and debt and what collections will stay on your credit report.

VantageScore 3.0

VantageScore 3.0 doesn’t weigh paid collection accounts. All medical collection data is now removed from the calculation of a consumer’s credit score.

VantageScore 4.0

In the VantageScore 4.0 model, paid collection accounts do not affect credit scores. Medical collection accounts that are less than 6 months old also don’t affect your credit score. Unpaid medical debt in collection is weighed less than other types of collection accounts in the credit score. 

FICO Score 8

FICO Score 8 ignores collection accounts with original balances of less than $100. But it weighs medical collection accounts, even paid medical collection accounts, like any other collection account. Collections are considered a part of payment history, which accounts for 35% of your credit score. With FICO Score 8, collections will stay on the credit report.

FICO Score 9

The FICO Score 9 improves on the FICO Score 8 in how medical debt is treated. FICO Score 9 doesn’t include paid collection accounts. It also weighs unpaid medical collections less heavily than other types of collection accounts.

FICO Score 10 and 10T

FICO 10 was introduced in 2020. It places a heavier emphasis on late payments and your credit utilization ratio. 

The 10T score introduces trended data, which helps distinguish borrowers who pay off their credit card debt in full each month from those who carry a balance.

How to dispute a collection with a credit reporting agency

If you find a collection on a credit report that isn’t correct or has already been paid off, you have the right to dispute it. Here are options you can consider. 

If an error has been made

If there is an error on your credit report, you have the right to dispute it to have the incorrect information removed. For example, if the debt in collections appears on the credit report that wasn’t your debt, you can request to have it removed. The Consumer Financial Protection Bureau has a template letter and instructions for each credit bureau to make it easier. 

If you’ve paid off the debt in full

Many credit bureaus may be willing to drop collections debt from your report if it’s been paid in full. Three of the course credit scoring models (all but FICO Score 8) drop paid collections debt from your credit score. 

If you negotiate

How long do collections stay on your credit report? They may come off early if you negotiate. If it’s been some time and you’ve had a strong payment history, the credit bureaus may be willing to drop collections on your credit report. It can’t hurt to ask and negotiate based on solid payment history and debt that’s been paid in full or nearly paid in full. 

Tips for maintaining good credit and avoiding collections

Avoiding collections isn’t the only way to keep your credit score high, but it’s important. Here are some strategies.

Regularly monitor credit reports

If you track your credit score, you can also spot any issues (like high utilization or unpaid debt) before they become severe.

Pay bills on time

Late payments (more than 30 days past due) can hurt your score for years. If you can, put your bills on autopay so you don’t forget.

Keep credit card balances low

Most experts recommend keeping your credit card utilization below 30%. High balances show lenders that you might have trouble repaying debt.

👉 Will Paying Collections Raise My Credit Score?

Improve Your Credit Score and Take Control of Your Financial Future

Following the tips here can help you maintain a good credit score and improve your credit score. As of 2023, medical debt will be significantly less concerning for your credit report. As the FICO 8 score is phased out by lenders, paid medical debt will no longer be considered. And with all credit bureaus, medical debt of less than $500 won’t show up on your credit report. With these additional advantages, consumers have a better chance of maintaining a high credit score even when faced with medical debt. 

FAQs 

Will paying off a collection remove it from my credit report?

When a collection account is paid off, your score will go up. However, the collection (unless it’s a medical debt) will still show up on your report for seven years.

Can unpaid medical bills go to collections?

They can, but the healthcare provider would need to sell the debt to a debt collector first. Additionally, credit bureaus have now begun to wait one year from the billing date before allowing the debt on your report.

Is there a way to remove collections from my credit report before seven years?

You can contact the creditor and ask for a goodwill deletion of a paid-off account. These aren’t common, but it’s still worth asking.