Sometimes we aren’t able to meet our debts for many reasons including financial hardship, medical misfortune or something else entirely. When this happens, lenders often sell the debt owed for significantly less to collections agencies. These agencies then attempt to collect on the full debt thereby netting themselves a hefty profit.

Most collections agencies wait to report to credit bureaus and use this as a threat to coerce money out of you. But once the damage is done, the damage is done. But before that point, consider bargaining with the debt collectors. They want your money and are often willing to consider options for how they’ll receive it. Consider offering a reduced amount for immediate payment or offering a payment plan that is affordable on your budget.

But always, always, always get the deal you’ve made in writing. And be sure to check your credit history closely, if you notice a collections agencies filed a negative report after reaching a signed deal with them, immediately jump into action.

Of course, if you fail to pay before they report to the credit bureaus you have time. Paying a collection account wont immediately help your score and wont repair the damage done.