Collection
A collection is an unpaid debt that has been turned over or sold to a collection agency to recover. It appears as a collection account on your credit report and stays there for seven years from the date of first delinquency.
Why it matters
A collection is a negative mark lenders can see for seven years; the seven-year clock does not restart if you pay or settle it, and newer FICO and VantageScore models weigh paid and medical collections less heavily.
Example
A $500 medical bill goes unpaid and is sent to a collection agency; it reports as a collection from the date of first delinquency, and even if you pay it later, that seven-year clock does not reset.
Learn more
Educational only — not financial advice. No guarantees.