I’ll get right to the point. Collection agencies report accounts they are in the process of collecting to the credit bureaus. This could be for any type of loan including medical bills, utilities, broken apartment leases and credit cards. The name of the collection agency is listed on the credit report instead of the credit grantor, who originally hired the collection agency.
Collection agencies begin collection efforts soon after the accounts have been written off by the creditor. The debt is not only reported as a collection but also reported by the original creditor as a “charge-off.” The original account is listed under the trade section of the credit report and includes your payment history on that account, which ends when the account is charged-off or sold to collections. The collection agency reports a new account under their name as a 3rd party collection account.