For businesses, the relationship between paying off collection debts and credit score improvement depends on the jurisdiction and the specific credit reporting system.
Paying the debt typically allows removal of the betalningsanmärkning (Sweden) or RKI notation (Denmark) after a specific period (usually 3 years from the original notation). However, the notation remains during this period even after payment.
Schufa and Creditreform entries are updated to reflect payment, which improves the score. However, the record of the collection claim remains visible for 3 years after resolution. Paying sooner produces a better credit profile than paying later.
Payment of the collection debt results in the notation being updated to satisfied on Experian and Dun and Bradstreet reports. The satisfied notation is significantly better than an unsatisfied one for future credit decisions.
For commercial credit (Dun and Bradstreet PAYDEX), paying the collection debt improves the score over time as the paid status updates. The improvement depends on the overall payment history and the proportion of accounts in collection.
Paying always improves the credit position relative to not paying. But the improvement is not instant and the record of collection activity typically remains visible for several years. The best strategy: pay before the claim reaches collection to avoid the notation entirely.
Our debt recovery agency with over 21 years of experience provides: Business to Business Collections Services, Legal Debt Collections and worldwide Skip Tracing services.
