Will your credit score go up if you pay collections?

Having an account in collections can significantly impact your credit score. Collections accounts show that you are behind on paying your debts and can make it more difficult to get approved for new credit. However, paying off collections can help improve your credit over time. Here’s what you need to know about how paying collections affects your credit score.

Quick Answers

– Paying a collection account will not immediately increase your credit score. It can take up to 30-45 days for the collection to be reported as “paid” and show up on your credit report.

– After paying a collection, your credit score may increase gradually over time as long as you continue to manage credit responsibly.

– Paying off collections can help improve your credit mix, payment history, and debt-to-credit ratios – all important factors in calculating credit scores.

– Settling collections for less than the full amount (pay for delete) can remove collections from your credit report and minimize damage to your score.

– Even after paid collections are removed from your report, they can remain on your credit history for up to 7 years from the date of your first delinquency.

How Collections Impact Your Credit Score

Collection accounts on your credit report indicate you have an overdue, unpaid debt that has been turned over to a collections agency. This signals to lenders that you are a high-risk borrower.

Specifically, having accounts in collections can hurt your credit in a few key ways:

  • Payment history – Collections can severely damage your track record of on-time payments, which makes up 35% of your FICO® Score.
  • Credit utilization – If the collections stem from a credit card or other revolving account, your credit utilization ratio will be higher.
  • Credit mix – Types of credit make up 10% of your FICO® Score. Too many collections and delinquent accounts can offset your mix of credit.
  • New credit – Collection accounts make lenders less likely to approve you for new credit.

As a result, having collections can lower your credit score anywhere from 100 to 300 points. The impact depends on your overall credit profile and history.

Does Paying Collections Immediately Raise Your Score?

Unfortunately, paying a collection does not automatically or immediately result in a higher credit score. In fact, your credit score may temporarily drop after you pay a collection account.

This counterintuitive drop happens because your credit report will be updated to show the collection as “paid” rather than “unpaid.” Since both paid and unpaid collections are factored into your score, this change can actually lower your score briefly.

Additionally, it takes time for the collection agency to communicate the payment status update to the credit bureaus. You will not see any positive credit impact until the payment is reported, which can take up to 30-45 days.

How Long Before Credit Score Improves After Paying Collections?

Paying your collections will not improve your credit score overnight, but it can have positive effects over time. Here is a general timeline:

  • Within 30 days – The collection account will be updated to “paid” status on your credit reports if the agency reports the payment. This may cause a small temporary drop in your score.
  • Within 60 days – As the positive payment history gets factored into your credit score calculations, you may start to see a gradual increase.
  • Within 6 months – As you continue to manage your credit responsibly, your score can continue to incrementally improve and recover from the collections damage.

The overall impact on your credit score depends on the rest of your credit profile. The higher your score was before the collection, the quicker it can rebound after payment. If you had fair or bad credit already, it will likely take longer to rebuild credit after paying collections.

Will Settling Collections Help My Credit?

Settling a collection means agreeing to pay less than the full outstanding balance owed to remove the account from your credit report. This method is known as “pay for delete.”

If a collection agency agrees to delete the account upon settlement, your credit score can benefit almost immediately since the adverse account will no longer factor into your score. Without the collection dragging down your credit, your score will usually see an increase.

However, some collection agencies refuse to delete accounts after settlement. In that case, settling has the same impact as simply paying the collection—it will update to “paid” status but remain on your report until it naturally falls off per the 7-year reporting period.

Can You Get Collections Deleted After Paying in Full?

Yes, it is sometimes possible to get collections removed from your credit report even after paying the account balance in full. Here are some potential options:

  • Goodwill letters – Write a letter to the collection agency asking for removal based on your years of good credit history and the hardship you faced. Emphasize it was a one-time mistake.
  • Pay for delete – Offer to settle the account for a lump sum payment in exchange for the agency agreeing in writing to delete it from your credit report.
  • Dispute directly – File disputes with credit bureaus citing inaccurate information on the collection tradeline or lack of validation from the collector.

If the agency verifies the debt and refuses removal, you may be able to appeal or file a complaint with the Consumer Financial Protection Bureau.

How Long Before Collections Fall Off Credit Report?

According to the Fair Credit Reporting Act, collections can remain on your credit report for up to 7 years from the date the account first became delinquent. This is true even if you pay the collection account in full.

For example, if you missed a credit card payment on March 1 2020 and the account was sent to collections on June 1 2020, the collection could stay on your credit report until June 1 2027. This 7-year period still applies even if you pay off the collection years earlier.

The collection will continue to impact your credit score until it naturally falls off your report after the 7-year time period. But each year the adverse effect on your score will diminish.

Can You Remove Paid Collections Early?

Since paid collections remain for 7 years, there is no way to force removal before the reporting time period ends. But you do have a couple options to minimize the damage to your score:

  • Successfully dispute collection errors to get them removed.
  • Negotiate pay-for-delete settlement offers with collection agencies.
  • Improve other areas of your credit to offset the collections damage.

If you already paid the collection in full, disputing it as inaccurate or unfairly reported may be your best bet for early removal. But this is challenging and not always successful.

How to Raise Your Credit Score After Paying Collections

Paying off collections is an important first step to raising your credit score. But you will need to take additional steps to continue boosting your score over time. Some tips include:

  • Pay all bills on time – Set up autopay or reminders to avoid new late payments.
  • Lower credit utilization – Keep balances low relative to credit limits.
  • Avoid new hard inquiries – Limit new credit applications for a while.
  • Mix up credit types – Build installment loan history in addition to revolving accounts.
  • Monitor credit reports – Dispute any errors with credit bureaus right away.

The higher your credit score was before the collection, the faster it can improve after payment. But if your score was already poor, rebuilding credit after collections will take consistent effort over years.

Here is an example timeline of how your credit score could recover after paying collections, assuming you also practice good credit behaviors:

Timeframe Credit Score Increase
2 months 15 points
6 months 45 points
12 months 75 points
18 months 100 points
24 months 130 points

This example assumes your score started at 550 after the collections damage and you were able to raise it to 680 over a two year span. But your exact timeline to recover 100+ points will vary based on your unique credit situation.

Alternatives if You Can’t Afford to Pay Collections

Not everyone has the financial means to pay off collections, even if they want to. Here are some alternative options if you are unable to pay collections in full or settle them:

  • Dispute the collection – You can contest inaccurate or unfair collections directly with the credit bureaus. This forces the agency to validate the debt and may lead to removal if they cannot.
  • Ask for debt to be recalled – For older accounts beyond the statute of limitations for collections, you can request a recall from the original creditor.
  • File for bankruptcy – Bankruptcy can eliminate qualified collections along with other debts but severely damages your credit initially.
  • Negotiate payment plans – If paying in installments is more affordable, you may be able to negotiate a payment plan on collections, although this keeps them on your report.
  • Wait for collections to fall off – Accounts automatically fall off your report after 7 years from first delinquency. The damage also diminishes year-by-year.

The downside with these alternatives is they allow collections to continue hurting your credit either until removal through disputes or naturally aging off your report over 7 years.


Having a collection account paid or unpaid can significantly bring down your credit score. Paying off collections is an important step in rebuilding your credit, but it doesn’t provide an instant fix. The positive effects tend to appear gradually over 6-12 months as long as you continue practicing good credit management.

Settling collections for less through pay-for-delete agreements can remove them from your report to minimize damage. Otherwise, even paid collections remain for 7 years. To maximize your credit rebound, focus on responsibly using credit and keeping utilization low after paying off old collections.