Your credit score measures your past credit activity. It factors in your repayment history, credit applications, number of credit lines and length of credit history, among other factors. Collection accounts will lower your credit score.
Significance
Collection accounts are considered negative items on your credit report and will reduce your credit score. The actual number that your credit score will drop depends on a variety of factors, including the number of collection accounts you have on your credit report, according to Privacy Rights.
Time Frame
Recent collection accounts have the largest negative impact on your credit score. As the debt becomes older, the effect on your credit score will lessen.
Considerations
Paying off your collection account will raise your credit score, according to MSN Money. Although the public record will remain on your credit report for seven years, the impact it has on your credit rating will lessen significantly.
0 comments:
Post a Comment