Did you sign a formal payment plan contract with the debt collector?
If so, its terms will govern you possible ability to cancel the agreement, and whether cancellation on your part would be a breach of contract.
It is likely that the payment contract constitues its own, separate agreement for which a breach would subject you to civil action, and payments on the debt would likely have their own, new statute of limitations beginning with your date of default on that contract.
That would be my primary concern, with the possbile addition of a judgment to your credit report.
As for the secondary and separate scoring issue of whether lates (monthly delinquencies) can be reported, the CRA reporting manual does not provide for the reporting of monthly delinquencies by a debt collector, and thus they wont report monthly delinquencies.
It may be possible, but I have never seen it, for the creditor to report monthly delinquencies if they still own the debt and the debt collector only has assigned collection authority. In that case, the payment contract might be considered as being between you and the creditor, with the debt collector acting only as their agent. However, I have never seen such reporting, and doubt that a creditor would attempt to do so.
However, a debt collector still effectively reports "lates" by simply making regular, updating reporting to the CRAs that their collection remains unpaid. By making updated reporting, they make of record that the period since initial delinquency has extended, and thus the scoring of the collection is affected without their actual reporting of a "monthly delinquency."
In that respect, yes, the debt collector can simply continue or renew regular monthly updated reporting that shows the collection as remaining open and unpaid, which effectively scores as increased delinquency.
