If your account is delinquent — meaning you haven’t paid it in a few months but you haven’t yet defaulted — making an offer to settle is in your best interest, assuming you have some money on hand. That’s because once a debt is defaulted, the credit card company takes a loss and sells off your account to a collection agency, often for pennies on the dollar. According to Fair Isaac Corporation, the company behind FICO scores, once a debt goes into collections, it creates a second black mark on your credit report, on top of the hit for the original missed payments. “Someone with a FICO score of about 680 can expect to see it drop by 45 to 65 points once a debt goes into collections,” Barry Paperno, consumer operations manager at FICO, says via email. “For someone with a FICO score of about 780, that drop can be as much as 105 to 125 points.”