Definitions for "Collection Account"
A collection account is an account in default of the contractual terms, and has been assigned to additional collection efforts by the creditor, or sold or consigned to a professional collection agency.
Refers to the status of an account owed to a creditor when it has been transferred from a routine debt to a Collection Department of the creditor's firm or to a separate professional debt collecting firm.
When a person does not pay back his loan, it is considered a collection account. Once the debt is charged off, the account will be assigned to a collection agency who will also report the debt as a collection account. Many times a person's credit report will show a charge-off and collection account for the same debt. Whenever a collection agency gets involved, the debt ultimately lands on the consumer's credit report(s).