But let's start from the beginning when you get your credit card. Obviously everyone knows that you need to pay your credit card on time. However, situation is not always the same when it comes repaying your credit card debt.

Once you are late on your credit card, Credit Card Company will alert you and gives you a chance to work with them to pay off your debt. This is the best chance ever, if you credit card company is willing to work with you. In most cases you will receive late notices and your credit score will start to take a hit. If you are one day late on your credit card payment, your credit card company will report this late as 30 days late on your credit report. Afterwards; you may receive another notice to call their credit department to help you out with your situation or work out some re-payment plan.

If there is no action from you or credit card Company, your unpaid balance may end up in collector's hands. Collections agencies are commission based most of the time. They have pre-arranged profit negotiations with credit card companies and typically credit card companies will take 40%-60% from your balance you own. If collector is able to collect more from you, they keep larger chuck of the profit for themselves.

Credit card companies are very serious about privacy of their data and most of the time dictate how your information should be transferred before collector can view your name, address, SSN number, etc.. Some of the top requests are SSL (Secure Server Locket), 128 bit encryption, FTP encryption and password, etc. With all of this and more, there are few credit collection agencies that spend money on more sophisticated software as it is very costly for them.

Once your data is opened or extracted from credit card company list, collection agencies use their own scoring model to determine how quickly you are able to repay your debt if they call you. They look into your credit score, how many tradeline you have, balances, late payment if any and so on. Upon all the data, their own credit scoring model will give them number as how quickly you are able to repay your debt.

But did you ever wonder why they keep calling you more and more? Collection agencies will more likely call more those will higher credit scores than those will lower credit score. If you have a good credit score, you are a high candidate for a repayment or settlement. You are more likely to settle than someone with lower credits score. However, if you have good credit score, collection agency will settle around 40% of the balance, as you owe them 60%. When someone with low credit score and same balance may be able to settle at 60%, as they will owe them 40%.

If you have a good credit score, you are more willing to maintain your credit rating. Collection agency knows this and offers you only around 40% settlement as well as they will call you more often to collect.

Once you have a low credit score, collection agency will try to reach you few times but eventually gives up on you for a few months as they know that you will not repay it back quickly for them to claim a profit.

Most financial professionals will tell you that maintaining your credit score is very important, however collection companies exploit that and use it against you. Yes, they are willing to even settle at 60%, but they will not do it as they will loose their profit. This is a game with numbers and profits.

If you have a good credit and fall behind, work with your credit card credit department and make sure they will not turn your unpaid balance to collection agencies, otherwise you will face numerous phone calls for a credit you build so well.