hi redrockrunner and welcome!
The best advice is to read all you can here before you prepare your letters. Spend at least a week or two learning exactly what will be best... understand state collecting SOL and reporting timeframes.
It is ideal for anyone to try to deal with the OC before a CA. It is also usually easier to do so with a medical collection, and to get a settlement. Get everything in writing and do not speak with a CA on the phone. Make sure any PFD to an OC includes that they will also have any involved CA remove any and all derog information regarding the account.
Settling as 'settled legally for less than full' will not affect your score any more than paid in full would, but doesn't look so great on a manual review. With a PFD, it won't matter as all derog info will be removed. If they don't take the first offer, you just keep trying until they do.
The sites that offer score monitoring offer FAKO scores, not FICO (the ones that matter). They are helpful to keep on top of things, but the alerts are not timely. A big change in FAKO will let you know that you might want to pull your FICO scores to see what is really going on. Search the boards on privacymatters.com, they have a very good offer right now if you know how to work it. There are other monitoring services available and many threads on people's opinions on them.
EQ 787 EX 781 TU 737 11/17/07
*** I am not an attorney. If I was, I might not clip coupons. If you want legal advice, consult an attorney. If you want my personal opinion, feel free to consider my posts***