Paid Collections Still Hurting Your Credit? Here’s Why (and What to Do About It)

You worked hard to pay off that collection account. You expected your credit score to jump, but instead… nothing changed. In some cases, the account still shows as negative. Sound familiar? You’re not alone.

Why Paid Collections Still Impact Your Score

When a collection is marked “paid,” the balance becomes $0, but the history of the account doesn’t vanish. Credit scoring models like FICO and VantageScore may still treat it as a derogatory account. Even worse, many lenders see the “Collection/Chargeoff” code in the background and weigh it against you, regardless of the $0 balance.

Common Reporting Problems With Paid Collections

• Conflicting Statuses: One bureau shows “Paid,” while another still labels it “Derogatory.”

• Payment Status Mismatch: An account can be “Paid” but still coded as “Collection/Chargeoff.” This confuses scoring systems and lenders.

• Contradictory Comments: Some reports say “Paid in Full,” while others say “Unpaid Balance Reported as Loss.” Both can’t be true.

• Re-Aging Issues: Different dates of last activity across bureaus can make a paid account look newer (and worse) than it is.

What You Can Do About It

• Review All Three Credit Reports — Don’t assume the bureaus match. Pull Experian, Equifax, and TransUnion side by side.

• Dispute Inconsistencies — Under the Fair Credit Reporting Act (FCRA), you have the right to demand corrections when data is inaccurate, incomplete, or unverifiable.

• Know Metro 2 Standards — A paid collection should be reported with a $0 balance and a closed status, not as an active derogatory.

• Work With a Professional — Navigating disputes, method of verification requests, and data furnisher challenges can feel overwhelming. Having an expert ensures each step follows compliance and gets the strongest results.

The Bottom Line

Paying a collection is only part of the battle. Making sure it’s reported correctly is what actually helps your credit profile recover. If your report shows old collections still coded as negative, you may be losing points you’ve already earned back.

At Nygaard Credit Solutions, we help clients like you clean up these inaccuracies every day. Because your credit shouldn’t hold you hostage long after the debt is resolved.

If you've got a collections parked on your report, we'll take care of it for you.

Your credit journey starts here.