I don't leave collars on my bullies when they're in the house. Much like their wrinkles, which get wet and irritated - and eventually grow yeast - so it sounds like that's what's going on.
It sounds like the fix is easy, if you're comfortable with it, which is leaving the collar off in the house. If not, maybe consider washing and drying under the collar every day so it doesn't get that build up.
Poor guy...hope he's better soon!