Collections refer to the process of pursuing payments of money or other agreed-upon value owed to a creditor. Debt collection is when a collection agency or company tries to collect past-due debts from borrowers. Debt collectors are third-party companies that work on behalf of another company to collect debts. If a company works for the original creditor, the creditor pays the debt collector a percentage of the debt collected. Sometimes, debt collection agencies will buy out the original debt for pennies on the dollar after you fail to pay back the debt to the original creditor — and then go after you.

Debt collection has been around as long as there has been debt and is older than the history of money itself, as it existed within earlier systems based on bartering. Debt collection goes back to the ancient civilizations, starting in Sumer in 3000 BC. In these civilizations, if a debt was owed that could not be paid back, the debtor and the debtors spouse, children, or servants were forced into "debt slavery" until the creditor recouped losses via their physical labor.

If you have debts in collection, that usually means a third party is trying to retrieve payment for your debts on your creditor’s behalf. Debt collection is a federally regulated process, and you have rights that collection agencies must respect. While debts in collection can negatively affect your credit scores, the severity of the impact diminishes over time.