Significance

• Collection accounts are considered negative items on your credit report and will reduce your credit score. The actual number that your credit score will drop depends on a variety of factors, including the number of collection accounts you have on your credit report, according to Privacy Rights.
  
  

Time Frame

• Recent collection accounts have the largest negative impact on your credit score. As the debt becomes older, the effect on your credit score will lessen.
  
  

Considerations

• Paying off your collection account will raise your credit score, according to MSN Money. Although the public record will remain on your credit report for seven years, the impact it has on your credit rating will lessen significantly.