It is some of the most common misunderstandings that people have about how could it reporting works. Just by paying off an old debt or a collection account you cannot remove the account from your credit report altogether. What will happen instead is that the collection account or the debt account will reflect in the status that the account has been paid off or settled. This in itself is more positive than having a collection account that remains unpaid. Not that making a payment on a collection account will immediately help with your credit rating because the damage was already done when a collection account found its way on your credit report.
A collection account gets deleted from the credit report the same time that it is original debt account is removed. This happens seven years after the date when the first late payment was reported and after which the account was never again current.
The collection agencies are required to report the original date of delinquency from the original account by the law. This is done so that the collection account can also be deleted when the original debt account is deleted from your credit report.
A credit history of a person is just that. It is the history of credit management of the individual. When the lenders choose to look at the credit report of a person in order to make a sound decision of approving or denying credit application then not only do they need to look at the positive and negative information present on the credit report but they also need to see the trend of good credit management over time. They need to see events over a certain length of time that will help them evaluate you as a sound credit risk. They also need to see other financial obligations and challenges that you may face from your past financial transactions. A lender typically likes to establish a person’s basic attitude towards credit management. You may have gotten here debts under control now but if you displayed a history of erratic and that credit management, then the lender may deny you for the credit in spite of your current debt free status.