Can a Collection Be Removed If Paid? What You Need To Know

Having a collection account on your credit report can be frustrating, especially if you’ve already paid off the debt. Unfortunately, paying a collection doesn’t automatically remove it from your report. However, there are some steps you can take to get a paid collection deleted.

How Paying a Collection Account Impacts Your Credit

When you fail to pay a debt and it goes to collections, it damages your credit in a couple of key ways:

• It lowers your credit score. Your credit score can drop by 100 points or more if you don’t pay collections.

• It stays on your report for 7 years. The account will stay on your credit report for 7 years from the date the debt first went past due.

Paying the collection account helps mitigate some of this damage:

• It changes the status to “paid.” Once you pay, the collection account will be shown as “paid” instead of “unpaid.” Many credit scoring models look down on paid collections less.

• It stops further damage. Payment prevents the unpaid debt from being resold to another collection agency which would add additional collections to your credit report.

• It makes credit repair easier You’ll have better luck getting a paid collection deleted than an unpaid one

But even though you paid the debt, the collection account probably won’t go away right away on your credit report. You’ll usually need to take additional steps to achieve this.

When Can a Paid Collection Be Removed from Your Credit Report?

In most cases, a paid collection will remain on your credit report for the full 7 years from the date the account first became delinquent. However, there are some circumstances where you may be able to get a paid collection deleted earlier:

• You dispute inaccurate information. If the collection account contains incorrect information, you can dispute it with the credit bureau and potentially have it removed.

• The collector agrees to a goodwill deletion. You may be able to persuade the collection agency to remove a paid collection as a goodwill gesture, especially if you have a good credit history otherwise.

• The debt was invalid. If you can prove the debt was a case of identity theft or that the collector lacks documentation to prove the debt was ever yours, you may be able to get it deleted.

• You negotiate early deletion. When initially settling the debt, you may be able to negotiate having the collector delete the account as part of the settlement terms.

Steps to Remove a Paid Collection

If you want to try removing a paid collection from your credit report sooner than 7 years, here are some steps to take:

1. Request validation from the collector

The Fair Debt Collection Practices Act requires debt collectors to provide written validation if you dispute the debt within 30 days of them contacting you. If they can’t validate it, they legally can’t keep reporting it.

2. Dispute errors with the credit bureaus

If the collection account contains incorrect information, like the wrong balance or date, you can dispute it with the credit bureaus. Provide copies of receipts or bank statements showing the errors.

3. Ask the collector for goodwill deletion

Contact the collection agency, explain you paid the debt, and request they remove it as a goodwill gesture. Emphasize your otherwise positive payment history.

4. Prove invalid/fraudulent debt

If identity theft or lack of documentation can prove the debt wasn’t legitimately yours, the credit bureaus must remove it upon verified dispute.

5. Negotiate early deletion

When settling a collection account, try negotiating having the collector delete the account from your credit report as part of the settlement terms. Get this agreement in writing.

6. Wait it out

If you can’t get the paid collection removed early, take comfort in knowing it will automatically disappear after 7 years. In the meantime, focus on improving your credit in other ways.

Improving Your Credit with Paid Collections

Having paid collections on your report doesn’t have to stop you from rebuilding your credit. Here are some tips:

• Pay all debts on time going forward. Making timely payments is critical for boosting your credit scores.

• Lower credit card balances. Keep balances low compared to your overall credit limit.

• Hold off on new credit applications. Each application causes a hard inquiry that can lower your scores temporarily.

• Ask about credit builder loans. These installment loans help establish positive payment history with on-time payments.

• Become an authorized user. Being added as an authorized user on someone else’s credit card can help improve your credit mix.

• Enroll in Experian BoostTM. This free tool lets you add on-time utility and telecom payments to your Experian credit report.

It will take diligence and patience to rebuild credit once you have collections—paid or unpaid—on your report. But taking the right steps will set you on the path to credit recovery.

The Bottom Line

In most cases, a paid collection will remain on your credit report for 7 years. But you may be able to get it removed sooner by disputing inaccuracies, negotiating with the collector, proving invalid debt, or asking for goodwill deletion. Along with removing the collection if possible, focus on making timely payments and keeping credit card balances low to aid your credit repair efforts.

To remove a collection from your credit report, you can try negotiating a “pay-for-delete” agreement with the collection agency. This means you pay off the debt, and the agency agrees to remove the collection from your credit history.