How Long Do Collections Stay On Your Credit Report?

We’ve all been there at some point- an account that you forgot about, a payment due notice that (ironically) went unnoticed, a bill that you just could not pay on the timeline required. In the financial and credit world, finding yourself underwater at some point is a very common experience.

When you fall seriously behind on debts that go unpaid, they can be sent to collections. This means that the original account holder sells the right to collect the debt to another company- called a debt collection company or debt collector.

Yes, having an account in collections negatively impacts your credit score. But after you’ve settled the debt and squared up your finances again, how long do collections stay on your credit report? In other words, how long will your credit score pay a price?

When Do Accounts Get Sent to Collections?

There is no set rule. Each account holder (such as a medical facility, credit card company, utility provider, etc.) can set its own rules about when an unpaid debt is sent to collections. Unfortunately, for some of these companies, the trigger is very low and unpaid accounts go to collections very quickly.

For others, if you are communicating with the account holder and trying to figure out a repayment plan, they will try to give you some time. But, typically after several missed payments, most accounts are sent to collections.

How Do Collections Accounts Show Up On Your Credit Report?

Accounts in collections can either get reported on your credit report as “in collections” or just show up as a debt owed to a particular company (either the account holder or the debt collection company that purchased the right to collect the debt).

This is important because you might check your credit report and discover the name of a company you don’t recognize saying that you owe money. Don’t dismiss this information. Research the company name and determine if it is a debt collection agency.

How Long Do Collections Stay on Your Credit Report?

An account in collections will typically stay on your credit report for up to 7 years. You may see this rule explained as 7 years plus 180 days, and in some cases this more nuanced answer is accurate. It takes into account dates of first delinquency (missed payment), dates of charge-offs, etc.

But for most people, what you really want to know is how many years will collections be reported on my credit report. And the answer is that the 7-year rule applies to most collections scenarios.

Are there exceptions to the 7-year rule? Of course!

The biggest exception is the 7-year rule for reporting debt collections on your credit report is for unpaid debts related to medical bills.

For medical debt on your credit report, the rules are slightly different:

• If the unpaid balance on your medical bill is under $500 when the account is sent to collections, and you pay it off at any point going forward, this medical collection debt is then removed from your credit report as soon as the debt is paid. So if you take care of paying off this debt as soon as you can, you don’t have to worry about being haunted by this collection account for the full 7 years.
• Medical debt may not always impact your credit score. Some credit scoring models do not include unpaid medical debt in their proprietary calculation of your credit score.
• Some states have state-specific law that limits the way unpaid medical debt in collections can be handled, reported, and accounted for.
• Unpaid medical debt doesn’t show up on your credit report for one year, even after it’s been sent to collections.

When is a Collections Account Not Allowed to Be on Your Credit Report?

There are a few situations in which debts in collections should not show up on your credit report. If it does, it is a credit reporting error by the credit bureaus and you have the right to challenge and correct the entries under the Fair Credit Reporting Act.

Collections That Should Not Be on Your Credit Report

1. ‍Outdated debt: whether it’s medical debt, credit card debt, personal loan debt, or similar, any debt in collections should only appear on your credit report for the allowable time period. If your unpaid debt in collections falls under the 7 year rule, it should be removed after 7 years. Likewise for any applicable reporting periods under federal or state law.‍
2. Paid, low-balance medical debt: This should be removed as soon as it’s paid, which typically means within one 30-day reporting cycle after it has been paid off.‍
3. Unverified Debts: If you’ve disputed a debt in collections on the grounds that it is NOT your debt and the debt collector can’t provide verifiable proof that it’s yours, it should not be reported on your credit report.  ‍
4. Uncollectable debts: there are certain debts that debt collectors should not be attempting to collect, such as medical debts related to workers’ compensation claims. If debt collection attempts are made against these debts and it gets reported on your credit report, you can likely challenge them. ‍
5. Debts a collector has agreed to remove: If you enter into a repayment plan with a debt collection agency and they agree (in writing) to remove the collection account from your credit reports as part of the repayment plan, it should not continue to appear on your credit report.‍
6. Duplicate entries for the same debt: If you have a single debt in collections, even if the debt is verified and accurate, reporting it in a way that makes it appear to be multiple debts in collections, this is a credit report error.

How to Dispute a Collection Account on Your Credit Report

Under the Fair Credit Reporting Act, you have a right to have an accurate credit report. This duty of accuracy includes the ways that debt in collection gets reported on your credit reports. And this duty applies to all three credit reports from all three credit bureaus- Experian, Equifax, and TransUnion.

Because you have a right to accuracy in your credit reports, you have a right to dispute inaccurate information, including accounts in collections.

How to dispute credit report errors

• Review: request and review your credit reports from Experian, Equifax, and TransUnion. You can do this easily on the verified site annualcreditreport.com.    
• Mark the credit report errors: Whether the errors are related to unpaid debts in collections or anything else, clearly mark the errors on your credit report.‍
• Write a strong dispute letter: Draft a letter that highlights all the credit report errors and very clearly explains that you have an FCRA right to dispute them.
• Identify supporting info: Brainstorm what type of documents and information you have that can support your dispute. Make copies and include this information with your dispute. Clearly explain how these documents support your dispute.‍
• File your credit report dispute: the credit bureaus invite you to file your credit report dispute through online platforms. We suggest filing your dispute through certified mail, with a return receipt. Keep copies of everything you send and the mail receipt.

When to Get Legal Help for Collection Accounts on Your Credit Reports

If you dispute unpaid debt collection accounts on your credit report but have any of these experiences, you may need legal help:

• Your dispute gets ignored by the credit bureaus
• The credit bureaus seem to be operating on their own timeline and not completing their investigation of your dispute within 30days
• You learn that the credit bureaus did investigate your dispute, but still think the info is correct
• The credit bureaus remove the unpaid collections account because your dispute was a success, but then it reappears later

How Mistake.com Helps Fight Unfair Collections on Credit Reports

Our job is to make fixing credit reports errors hard on the credit bureaus and easy on you. If you find credit report errors on any of your credit reports (from Experian, Equifax or TransUnion), let us know and we'll handle the dispute for you.

Here’s how we make disputes easy:

• We review your credit reports and the credit report errors you’ve spotted
• We listen to your story and help identify what types of documents and information you’ll need to support your dispute
• We draft the credit report error dispute letter for you
• We track the dates and make sure the credit bureaus meet their legal obligations
• We set our legal team to work filing a lawsuit if your dispute gets ignored or the credit report errors don’t get fixed for good

Call or contact Mistake.com today!  Easy, peasy, fast.

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