How long will a negative item that has been paid off impact my credit?

[Nigel]

I just paid off an old medical bill that went to collection a year ago, but my credit score haven’t move up at all. How long will a negative item that has been paid off impact my credit?

[Michael]

You should start seeing improvement after 2 yrs

Per the Fair Credit Reporting Act (FCRA), most negative information is reported to your credit report for a maximum of 7 years (some exceptions apply) from the date of first delinquency.

FICO Score weighs negative items differently based on how old they are. The older the item is – the less effect it has on your score. In fact, 90% of your score is based on your credit activity from the last 2 Yrs.

However, FICO score doesn’t differentiate between up-paid to paid debt. They count just the same in your score.

That doesn’t suggest that you made a mistake paying off that medical bill. On the contrary – you did the right thing. Not only you avoided a lawsuit, most creditors actually pull your actual credit reports and review them. Paid debts look much better than unpaid ones in the eyes of a potential creditor, regardless of how it affects your score.

In any case, as explained above the effect of that collection account on your score will be negligible after two years, assuming that this is the only blemish on your report.

Hope this helps.

[Author]

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