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How Long Do Collections Stay on Your Credit Report? contents
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How Long Do Collections Stay on Your Credit Report?

5 min read
Published December 4, 2024
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Key Takeaways

  1. Collections stay on your credit report for around 7 years plus 180 days from the date the account first became overdue.

  2. Collection accounts hurt your credit score and may deter lenders from offering you credit.

  3. If you’re struggling to repay bills, it’s better to contact your lender and request a new repayment plan rather than risk collections.

Financial products such as credit cards and personal loans can help make life easier by providing access to credit. But if you use credit irresponsibly, it can cause financial instability and lower your credit score.

Missing a credit card payment can negatively impact your credit score as well as result in the lender sending your credit card debt to collections. Collections debt not only impacts your credit score in the short term, but also remains on your credit report for years after the fact.

How collections get on your credit report

Missing a credit card bill payment or a loan payment is detrimental to your credit score, but the exact process that follows a late payment may differ based on your lender's timelines and policies. The process may follow steps similar to these, but you should confirm the terms and process with your lender.

  1. You'll get reminders from the lender when you first miss your payment.
  2. The lender may add late fees or increase interest on an outstanding credit card balance.
  3. Your debt may be sent to the lender's internal collections team who may attempt to recoup the debt.
  4. When the lender decides they can’t recover the debt, your account will be charged off, or written off as a loss.
  5. The lender closes your account, and they may sell your debt to a debt collection agency. Typically, the creditor will report the charge-off to the major credit bureaus at this time.
  6. The debt collection agency will contact you to recover the debt.

Remember, a collection agency may also notify the credit bureaus about a collections account, but the Consumer Financial Protection Bureau (CFPB) outlines rules that a debt collector must follow before reporting debt to a credit reporting company.

The debt collector must communicate with you about the debt in person, over the phone, by mail, or by email. If the debt collector contacts you in writing, they must wait around 14 days for a notice that their letter or email was not delivered.

The debt collector will send you a validation notice about a debt stating that they've met their obligation to contact you and can now report the debt to credit reporting companies.

How long do collections stay on a credit report?

Usually, late payments and accounts in collections remain on your credit report for as long as 7 years and 180 days from the date the account first became delinquent. This is because lenders will typically charge off the debt around 6 months after the first missed payment.

For example, if you missed a payment on June 1, 2023, your lender would likely charge it off by December 1, 2023. So, the debt wouldn’t be removed from your credit report until December 1, 2030.

If the debt remains unpaid, its status will be visible to any lender who accesses your credit report and may deter them from lending to you. If you pay down the debt after it’s sent to collections, the account status may show as paid on your credit report, according to TransUnion®, but the account will remain on your credit report.

You can also write a goodwill letter–a letter that explains the reasons for paying your debt late–to the creditor and request they remove the account after you’ve repaid the debt. However, they aren’t required to remove the account and usually act at their own discretion.

How accounts in collection affect your credit score

Collection accounts will likely have a negative impact on your credit score mainly because it pertains to payment history, which is a significant factor in calculating credit scores. You may see a drop in your credit score when your account is sent to collection. And while the collections account remains on your credit report for 7 years, the impact of this account on your credit score reduces over time.

Bear in mind that the type of debt also affects the impact of a collections debt. For instance, the three major credit bureaus–Experian®, TransUnion® and Equifax®–announced that medical collections with balances under $500 will no longer appear on credit reports, according to TransUnion.

Did you know?

If you’re worried about paying credit card bills on time, you might want to consider a Discover balance transfer credit card offer with a low introductory interest rate. This may lower the amount of money you spend on interest if the rate on the new card is lower than the rate on the existing card.

Learn More

What if the collection is in error?

If you believe the collection account is in error, you can take steps to dispute the debt and fix it. If the debt collector has made the mistake, the CFPB says to send them a written dispute about the debt within 30 days of your initial contact. A collector must stop collection activity if you raise a dispute, and they may only restart collection activity once they’ve responded to your dispute.

If a collections account is still on your credit report after 7 years, you can file a dispute with the credit bureau that sent you the erroneous report. You can usually do this through your account on the credit bureau's website.

Collections activity stays on your credit report for about 7 years. While the impact of collections on your score will diminish over time, it’s best to avoid collections and credit damage by making your payments on time and in full. If you miss a payment, make the payment as soon as you can. In case you’re short of funds to repay the debt, it’s best to contact your lender immediately and inform them of the situation. They may offer you a fresh repayment plan that makes repayment easier and minimizes credit damage.

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  • Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.