This sounds like my financial start. I wasn't tracking anything financial other than my bank balance, then got out of college to find out the only line of credit with my name on it (handled by my parents) was delinquent. Only $400, but 90 days past due and reported, so my score was trashed. I paid it off immediately. On your report, "delinquent, but now paid" looks way better than "in collections, unsettled".
So it just sucks, and it took me another 8-9 years of perfect credit history to crack into the 800+ club. Most of that time I was sitting in the upper 600s because it takes like 7 years for a delinquency to drop off of your credit report. Oh well. But still, I definitely vote against having something in collections hang over your head until the debt collectors give up. That's no way to live.
