I have been actively working since August of last year to improve my credit score. I even reached a 760 as my best credit score. Then a collection agency reported me for a $116 medical bill. I have tried to call and asked for a "pay for delete" but they refuse to do that. Is a settlement or "paid in full" status going to help my credit? My credit score fell a whopping 90+ points based on this report. Previously, I had no blemishes. What can I do now that my score has fallen to 655? Somebody please give me some reassuring advice that it will all be OK.
Starting Score: 760
I can tell you by personal experience that a settlement or a paid in full on a collection does nothing (or at least very little) to help credit scores. I would keep working on the PFD attempts.
Starting Score: 583 EQ, 612 EX, 569 TU
The collection is valid. It was from a visit to the hospital when I was in college. I just graduated and I honestly did not have the money to pay it back until recently.
I just don't want to get a bad deal on a home in the future because of one little mistake. Although I really don't plan on buying a home or seeking credit for anything in the next 7 years. 
Research the HIPPA process for a medical collections. I have not done this as of yet but may have to explore it with some medical debts. You can not really talk much about it on these forums but do some searching outside of here and see what you come up with.
Yay! Thanks for the advice. I continued to stay in contact with the collection agency and they wiped the negative information from my credit report. FICO score saved and crisis averted. 