If you have a debt that has been placed with a collection agency it is still a good idea to pay it off. Any paid account on your report will help. Not all collection agency reports are the same and not all debts that they attempt to collect are owned by the agency. A person's credit report shows the status of debts, and who holds the debt. So if a debt has been referred to a collection agency it will show as a collection account.
Collection Agencies
Some "debt collection agencies" are just collection branches of the creditor set up in the belief that you'll take them more seriously. Actual agencies buy the debt from the creditor or try to collect it on commission. Some of the debts they buy are charge offs, debts the creditors have written off the books, in hopes of collecting more than they paid for it.
Reporting Debts
As long as a debt is owned by the original creditor they are the ones who report the debt and can make changes to how the debt is reported to the credit agencies.
If a debt is owned by a collection agency after the original creditor charges it off, then the collection agency reports payments and payoffs to the credit agencies.
Payments to Collection Agencies
Making a payment to a debt collector, even one paying off a debt, won't take the record off your credit report. Payments will show on your report and your total amount of debt shown will decrease.
All credit files stay on your report for seven years since the last activity, due to Fair Credit Reporting Act guidelines. Phone calls to the creditor or collection agency won't get the debt taken off of your credit report..
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