If you miss one or more debt payments in a row, you might hear from a third-party collection agency. Once this happens, your credit report will list it as a collection account, which could have a negative impact on your credit score. You can take these simple steps to deal with an account in collections.

Confirm you owe the debt

View and download a copy of your credit report from each of the three credit bureaus once per year — Equifax, Experian and TransUnion — at annualcreditreport.com. Once on the site, complete the request form, select your reports and verify your information for security purposes. Confirm all information on the report about the debt is correct. If you notice anything that does not seem right, contact the credit bureaus immediately, ideally in writing. If you have any transactions by phone, document them.

Pay or settle the debt

Pay the entire amount due. If you confirm the debt is legitimate, paying the entire amount due shows lenders you are committed to taking care of your financial responsibilities, and it could improve your credit score. Once the collection agency receives your payment, the agency should notify the credit bureaus the collection is paid in full. Pay a portion of the amount due. If you cannot pay in full, ask the collections agency for a settlement so you can pay a portion of the full amount owed in exchange for the account being reported as paid on your credit report. The collection will remain on your credit report for seven years after the initial reporting date; however, the attempt to repay your debt may influence lenders to take a chance on you if you ever need credit again.

Disputing a collection account

If you were not able to pay any portion of the debt, the collection account could remain on your credit report for longer than seven years. If this happens, dispute the debt with the credit bureaus. If you find yourself with a debt in collections, check with a financial counselor or the Civic Experience Center.