Collection Account
A debt that has been turned over to a collection agency, typically appearing as a separate account on credit reports.
A collection account is a debt the original creditor has either transferred or sold to a collection agency. Collections appear on credit reports as separate tradelines from the original creditor's account, often resulting in the same debt being reported twice (the original tradeline showing $0 / sold-or-transferred status, plus the collector's tradeline showing the active balance).
Collections damage credit scores significantly — typically 50-100+ points depending on the original balance and recency. Under FCRA §605(a), collections stay on reports for 7 years from the original DOFD with the first creditor. Paying a collection doesn't reset the clock and doesn't automatically remove the negative mark, though FICO 9 and FICO 10 (and VantageScore 4.0) ignore paid medical collections.
Collection disputes have unusually high success rates because: (1) sold-debt documentation often doesn't transfer cleanly, (2) collectors must validate debt under FDCPA §809(b), and (3) re-aging is common at the collection-transfer boundary.
Also called
Related terms
A consumer's right under FDCPA §809(b) to demand a collector produce documentation proving the debt.
Federal law that regulates debt collectors. Gives consumers the right to demand validation of debts.
FCRA §605(a) limits how long negative items can stay on a credit report — 7 years from date of first delinquency.
An accounting status creditors apply to delinquent accounts (typically 180+ days late). The debt is still owed.
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