A debt in collections is one of the most serious negative items that can appear on a credit report because it means the original creditor has written off the debt completely. So when a debt is sent to collections, it can have a severe impact on your credit scores.
That’s why working hard to get current before an account enters collections can help your credit recover faster from a late payment.
How much the collections account will impact your credit depends on your credit score range. A collections account will have a more significant impact on a credit score in the 700s than one in the 500s.
If you already have debts in collection, the good news is that the impact on your credit scores will diminish over time. And eventually the debt collection will fall off your credit reports completely.
Generally, an account in collection will remain on your credit reports for seven years.