Collections accounts can appear on your credit reports after a certain period of non-payment, typically 180 days, and can cause your credit scores to drop substantially.
While different lenders have different policies, after a certain period of non-payment the original lender may write off a debt as a loss and sell it to a collection agency. The collection agency will then attempt to collect the money owed. You will not necessarily be notified by the original creditor that your account is being sent to collections.
The original creditor or the collection agency may report the account in collections to one or more of the consumer credit bureaus – Equifax, Experian and TransUnion – and the account should show up on your credit reports with a “collection” status. If the original lender he writes off this debt as a loss and sells it to a collection agency, the original account should be updated to show “payment after charge off/collection” (or something similar) on your credit reports. Credit reports should still show the history of the account, including the amount that was written off.
An account reported as a “collection” can cause your credit scores to drop substantially. Here's more information on what to do if you have an account in collections and what it could mean for your credit scores.
How long do collections stay on credit reports?
Accounts in collection generally remain on credit reports for seven years from the date of the missed payment that led to the collection status.
How can I view my collection accounts on Credit Karma?
If an account in collections is reported on your TransUnion or Equifax credit reports, you can access your full reports on Credit Karma. Log into your Credit Karma account and review your credit reports to see if you have collections information.
On Credit Karma you can check for collections accounts in your credit reports:
Both reports should include details like the original creditor and the amount due. If it’s available, you’ll also be able to find the contact information for the collection agency in your full credit reports. Your Experian credit report isn’t available on Credit Karma, but you may also want to check there for any collections information too.
Learn more about how collections accounts can impact your credit.