if its already been referred to a debt collector does that mean my credit rating is already screwed? And how do i get it removed.

we had installment payments owing for something but i hadnt recieved the letters/notices becuase htey were going to the wrong address. the creditor says they never recieved our change of address, when I know i posted it at least 3 times, in addition to verbally informing them more than once, which they will not accept.

Anyway Ithought i had an agreement in place with the creditor but apparently not. I rang today and they seem willing to work something out but had no record of our previous discussion - well not an accurate one anyway

If we do make an agreement is it up to me to let the debt collection people know or will the creditor do this?
When the debt is repaid does it come off my credit rating or do i have to petition to tave this done?

Im really ****ed off about this becuase i thought I had a handle on thinigs and then this happens, and to make it worse dh gets the letter while MIL is at our place so now she knows all about it as well.