Having collection accounts on your credit report will impact your credit score dramatically.  It is not uncommon for unpaid collections to impact your credit score 100 points or more.

Will A Collection Agency Take Payments?

Most collection agencies will take payments when it comes to settling a debt.  You probably will not be able to negotiate with them about the principal balance however.  Just because you are making monthly payments to the collection agency does not mean that they are done with you.  You could stop making payments and they need to start chasing you down again.  You are probably better off to save up and try and make a lump sum payment to them.  A collection agency would rather just settle the debt in one step rather than stretching it out over a long period of time.

How Do I Make Sure A Creditor Will Remove Negative Items From My Credit Report?

If the creditor agrees to remove negative items on your credit report, you must get it in writing.  Creditors and collections agencies are notorious for not following through.  Your oral agreement will probably not hold up in court either.  You need to make sure that you get it in writing.  You best bet is to write the agreement on the back of the check that you are going to send in for payment.  You can just spell out that by depositing the check, the creditor agrees to remove any negative entries on your credit report and that they agree that the debt is satisfied and paid in full.  This will work great in the event that the creditor never gets you their written agreement back to you.  You check will be a back up for you.

Do Not Offer More Than You Can Afford To Pay To The Creditor

You may have good intentions of paying off a debt but do not risk your secured debts like your car and home just to pay off a collection agency.  Just pay or offer what you can afford.  It is not worth getting into more trouble just to satisfy a collection agency.