Another little known fact is that if a borrower pays off an old collection account, it updates to their credit report and once again becomes a recent event that is highly damaging to the credit score. For example, a collection account from the year 2000 that is paid off in December 2006 is re-scored in December 2006 by FICO as a very recent and detrimental entry to the score. So even though the account may show "paid in full", the recentness of the "delinquency" will hurt the score more than leaving the old unpaid account alone.

Therefore, while it's best to pay off very recent collections, and sometimes essential to loan approval, strictly from a credit-scoring perspective, it is quite often better not to pay off an old collection account and to let it drop off the credit report at the seven-year limit.

This is why many experts feel that minor collection accounts unfairly drag down credit scores and undeservedly make people look like greater credit risks than they really are, especially those who pay off such accounts in good faith.