Letting a debt be referred for collection is never a good move.
First, you have a debt collector on your heels.
Second, they are permitted, once they have obtained collection authority, to report that fact to the CRAs, which is then scored by FICO as an additionally derogatory item.
Most debt collectors will report as a collection tactic, knowing that consumers who pull their credit reports and scores will see the negative impact, and thus their reporting could be an additional incentive for the consumer to pay. Once reported, later payment of the debt is not basis for deletion of their reporting. So you are relegated to asking for good will, either prior to payment in the form of a pay for delete offer, or after payment by way of a standard good-will request.
The preferable option is to pay the OC before they send to collection. If the OC has already reported, you can make your PFD offer to them, and thus attempt to get all negative reporting removed.
Collections do not automatically get reported. It is the option of any debt collector whether they report. If they are a major debt collector, reporting is usually a standard collection practice.
