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How Many Points Will a Collection Affect Your Credit Score

how many points will a collection affect your credit score

If you’re wondering how many points will a collection affect your credit score, you’re asking the right question. Facing a debt collection can be scary and knowing the collection may go on your credit report can be even scarier.

The good news is, a collection account doesn’t have to completely ruin your credit score. Here’s what happens when you have a collection account:

Debt Collectors Will Use Many Avenues to Try to Reach You

When you have a collection account, debt collectors want to get your attention. In addition to calling you several times of day and sending payment notices to your address, they will send an update to your credit report, giving it a “collection” status.

This can happen without your knowledge because creditors are not required to tell you they are sending your account to collections.

“Collection” Account Status Drops Your Credit Score

Having a collection account on your credit report will always lower your credit score. Having a major payment delinquency sends the message that you are not consistent in paying off your debts.

The low score can affect your ability to receive credit cards and loans in the future. It’s also important to remember that the amount of the collection debt doesn’t make a major difference. Whether you owe $20 or $20,000, the “collection” status on your account will cause your credit score to plummet.

Your Credit Score Will Take the Biggest Hit At the Beginning

Your credit score will take the biggest hit immediately after you receive the “collection” status. The date that your collection debt is recorded on your credit report matters, though. The date on your report will appear as the date the collection agency took over collection responsibilities. The more recent this date, the more impact the status will have on your score. However, creditors don’t generally continue to update your account after you have this status. This allows the impact of the “collection” status to lessen over time.

So, How Many Points Will a Collection Affect Your Credit Score?

The amount your credit score will drop due to a collection depends on what your credit score is prior to your “collection” status. If you previously had a score in the 700s, the initial collection can cause your score to drop by more than 100 points. People with lower scores to start with may see a smaller drop. But, it will still be significant.

The Good News: Credit Repair Works

If you’re living with a low credit score due to a collection status, there’s hope for you. Credit repair works. USA Credit Repair has helped more than 800,000 customers repair their credit. You don’t have to live with a low credit score any longer.

Our proven process can help you remove the negative marks on your credit report affecting your score. We will also design a customized action plan for you to make sure you can pay off your debts and increase your credit score well into the future. Give us a call today to learn more!