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 can stay there for up to seven years, counted from 180 days after the missed payment that led to it.
Why it matters
A collection is a negative mark lenders can see for up to seven years, and paying or settling it doesn't restart that clock. Newer scores such as FICO Score 9 and VantageScore 3.0 and 4.0 ignore paid collections, and those VantageScore versions also ignore medical collections, but many lenders may still use older versions that count them.
Example
A $600 phone bill goes unpaid and is sent to a collection agency. It can stay on your report for up to seven years, counted from 180 days after the missed payment that led to it, even if you pay it later. Medical debt is different: under the three bureaus' own rules since 2022–23, paid medical collections no longer appear on credit reports, unpaid ones aren't listed for the first year, and ones with an initial balance under $500 aren't listed. Some states have extra limits.