Can a Paid Collection Account Still Report to My Credit Report?

Many people don’t try and get a Collection Agency to commit to removing a listing once the debt has been paid in full. The original creditor and the collection agency can both report those items to your credit report. The original creditor should be reporting the debt as charged off or turned over to a collection agency. The collection agency can report the item as an Open Account (They are still trying to collect the debt), Settled for Less Than Full (Meaning that you paid only part of the full amount due but it is closed), Paid In Full (Meaning that you paid the entire balance due).

When a new creditor looks at your credit report, it is important that you try and have it cleaned up to the best light as possible for you. Sometimes when you are negotiating with the collection agency, you can negotiate them removing their listing entirely. This means that you will not have any negative listing from the collection agency. Collection Agencies do not have to do this and most of the time, they will not agree to this, but it never hurts to try.

The next best thing is that the Collection Agency should report that the balance is paid in full. By reporting that a new creditor will see that you had a problem but got it settled and then paid the debt in full. If you make a deal and only pay part of the balance due, then you might get it listed that way on your credit report. It is important that you try and get the solution worked out before you pay anything. Get everything that you agreed to in writing because otherwise you don’t have any recourse to prove what is your agreement.

It is best to resolve any problems prior to it getting to a collection agency but once it is there, take the time to resolve it quickly. Anything that is reporting negatively to your credit report can be fixed if you try hard enough. It is important that you do your best to pay your past debts and get them reporting accurately. A paid debt even to a collection agency will weigh less and less to your credit score as time passes. After 48 months most of the things reporting don’t hurt your score terribly and positive things will help you more if they are current.

Mel Jensen is a retired Customer Service Manager with Ovation Credit Services. He has written many articles regarding Credit Repair.