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Collections And Your Credit Score
Having only one account in collections is enough to ruin your credit score and any chances at getting any future credit. Having an account in collections simply means you cannot or will not pay your bill. If it's because you "will not" pay this debt there had better be a good reason, or at least some legal action in place.
Not paying a bill over principle is usually better handled in the civil court arena. There are many remedies available to those who have been wronged in the business world other than not paying a bill that's due.
If you "cannot" pay your debt then we arrive at How The Credit Score Is Affected. If you're currently in collections and making payments towards the bad debt than the bleeding has already stopped. The damage is done, but the bleeding has stopped. Your credit score will drop drastically, and the chances of getting any new revolving credit is usually bad for the next few years. Once you pay off the bad debt you can start the ball rolling again.
It's imperative that once you enter collections you make sure to keep making your payments in a timely fashion. Credit bureaus know we all make mistakes, but when given the chance to recover do these people pay their bills and move on, or do they continue to skip payments and let their credit get worse?