How will collections affect my credit score?

Any collections item, medical or not, can lower a person’s FICO credit score by as much as 100 points. The degree to which a collection hurts your credit score is directly correlated with how high your credit score is when the collection agency reports the debt. The higher your score, the more points you can lose.

Generally accounts which go into collections will appear on your credit report for up to 7 years. Once you pay a collection account in its entirety the collection accounts status should change to “Paid, Paid Collection, or Closed”. If you settle with the collection agency for less than the full amount, your credit report should list the account as “settled, settled for less, or settled for less than full balance”.

Paying off the collection account sooner doesn’t mean it is deleted from your credit report immediately, instead it is just listed as paid. It is smart to pay your debts to reduce the debt you owe and show that you can repay your obligations. The collection paid or unpaid will have a negative effect until it’s purged from your report. One of the most important factors in how collections accounts affect your score is how recent the collection occurred, not necessarily the amount of the collection.

Medical debt is the most common type of collection account, representing nearly half of all reported collections. Almost 1 in 6 credit reports contain a medical debt collection, according to the Federal Reserve. With the new FICO scoring model, medical collections—including unpaid medical collections—will have a smaller impact than non-medical collections.

If the collection on your report is not your debt, you’re not required to pay it and creditors cannot list it on your report. If the collection status still remains on your report and more than 7 years has passed you should dispute the debt from your credit report.

With a physical site inspection those customers ordering credit reports for the purpose of tenant or employment screening from StarPoint Tenant Screening can view collection account detail when provided such as:

  • Creditor
  • Member number
  • Balance
  • Date the Collection was opened
  • Date Reported
  • Account Number
  • Date Paid

Individuals wishing to view their own credit report should visit for a free report annually.

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