If I’m contacted by a debt collector and I pay immediately, will the debt show up on my credit report anyway? Do I have a grace period?
If you’re contacted by a debt collector, it’s likely that your account is in default by more than 90 days, maybe as long as six months. The negative effect of having your account in collection is less than the effect that you will have already incurred from being late, 30 days overdue, 60 days overdue, and 90 days overdue. The negative effects of a payment that is successively overdue stack up and will stay on your credit report for seven years. Also, the information that the account was charged off (closed by the lender) will remain for the same amount of time regardless of whether you paid off the debt with the debt collector.
You may be able to work out a grace period with the lender before they send the debt to collection. However, once the debt is sold to the debt collector, the damage to your credit is already done.
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