When you sign an "application" regarding rentals, it usually does mean you've agreed to a contract, especially if you are then told that you qualify financially (in other words the qualifying is like a formality sealing the deal). If you really were misled (and it's your first time renting) re what it was about, you might have a shot at breaking the lease, but the fact you didn't move in doesn't matter - why should they care if you're there or not as long as they get their money every month? But the move-in fee business is also interesting, and I think you really really need to talk to a lawyer about the whole thing rather than depending on friends or (especially) strangers on the internet who may tell you with great confidence that they have the answer, but may be out to lunch. But don't wait any longer - your credit rating is already compromised.

If it went to collections you are too late. Your credit is dinged and you have to now deal with the degenerate collection agents who don't care about your story and have heard every excuse in the book.

Even going to a lawyer is going to cost you a lot of money, you are better off just paying off your debt and seeing this whole thing as a learning experience: READ BEFORE YOU SIGN!

An Application to rent is a pre-qualifying measure, a screening tool. That's the phase where references and credit are typically checked and verified, etc. Some places charge an Application fee, others don't.

A Lease is an entirely different document. That's the legally binding contract that spells out the terms and conditions for renting a specific location for a specific period of time in exchange for a specified amount of money.

If the apartment complex charged an Application fee and you agreed to pay that fee then you could be held responsible for it. (Honestly, tho, sending an App Fee to collections seems like a lot of trouble to go through, because collection agencies charge for their services. But some places are sticklers about things like that.) If it's a nominal amount (e.g. $50) it would cost more to get a lawyer to fight it than to just pay it. If that's the case, talk to the collection agency a.s.a.p. Just because something has gone to a collection agency does not mean it's hit your credit report (yet). If you make arrangements to pay, and take care of it, then you have an opportunity to keep it off your credit report. If you don't pay, odds are good it will land on your credit report. (You can check and see the status of your credit for free by going to annualcreditreport.com. No gimmicks, it's a site endorsed by the federal government. Federal law allows consumers one free credit report per year from each of the 3 credit bureaus.)

If, however, they are trying to charge you rent, but you never signed an actual Lease, that's definitely worth seeking legal advice.

Were you ever given keys to your apartment? Did they assign you an apartment number? How long did they wait before they rented it to someone else? They can't charge you for the months they re-let it and others moved in.

Give us more information and we may be able to help you.