The Truth About Paying Collection Accounts

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The Truth About Paying Collection Accounts

When you encounter a tough financial time, chances are, you just want to get your debt paid off as soon as possible, with the hope that a collection account won’t become a permanent addition to your credit report.  Because after all,  you want is your score to improve, right?  Unfortunately, once a collection account creeps its way onto your report, it finds a home there, as part of your credit history.

Truth 1: Paying Off a Collection Account Doesn’t Improve Credit Score

Any appearance of a collection account on your personal credit reports lowers your credit scores.  Unfortunately, once the collection account appears on your credit report, it’s part of your credit history, and it doesn’t really make a difference whether you pay it off or not. 

Truth 2: The Original Amount of a Collection Account Doesn’t Make a Difference

The fact of the matter is that the amount of money (big or small) on the collection account is virtually irrelevant, regarding the effect it has on your credit score.  Maybe it’s $200 maybe it’s $7,000 – the bottom line is that anything from a collection agency that appears on your credit reports will lower your credit score, no what the amount of money is.

When Was the Last Time You Checked Your Credit Reports for a Collection Account?

Check your credit reports regularly: Go to and pay attention to any negative items in the Public Records section.

Subscribe to a credit monitoring service: This allows you to monitor all activity on your credit reports.

Other Items in the Public Records Section That Are Similar to Collection Accounts…

– Federal and state tax liens (released and not released)
– Judgments and satisfied judgments

Similarly to collection accounts, when any of these items show up on your credit reports, your FICO credit scores go down.

The Amount You Can Expect Your Credit Score to Plummet…

Unfortunately, there’s no specific number, but it can easily go down by 100 points, or more.
If you pay off the collection, it will show up as a balance of $0 on your credit report.  Nevertheless, your credit scores will decrease whether the public record item is paid or not.

Basically, once a collection account appears on your credit report, simply paying your debt off, will not make it go away! Pay off all your debts promptly and be mindful of what’s on your credit report, so that a collection account won’t land on your credit reports to begin with!

For more information on collections accounts, understanding your credit reports, or fighting a particular debt, don’t hesitate to contact the Adkins Firm, your Atlanta Bankruptcy experts!

About the Author:
Article written by Michael Mroz. For debt relief assistance in Atlanta, Georgia. Contact Marty Adkins of the Adkins Law Firm for the best advice on becoming financially successful and bankruptcy legal advice
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