Its natural habitats are subtropical or tropical seasonally wet or flooded lowland grassland, swamps, and heavily degraded former forest.

The rusty-collared seedeater was included by the French polymath Georges-Louis Leclerc, Comte de Buffon in 1775 in his Histoire Naturelle des Oiseaux.

[2] The bird was also illustrated in a hand-coloured plate engraved by François-Nicolas Martinet in the Planches Enluminées D'Histoire Naturelle which was produced under the supervision of Edme-Louis Daubenton to accompany Buffon's text.

[3] Neither the plate caption nor Buffon's description included a scientific name but in 1783 the Dutch naturalist Pieter Boddaert coined the binomial name Loxia collaris in his catalogue of the Planches Enluminées.

In 1904 the Austrian ornithologist Carl Eduard Hellmayr designated the type location as Rio de Janeiro in Brazil.