When your bank is unable to find you or get you to pay, it decides to wash its hands of the debt. They sell it to a debt collector for pennies on the dollar, and the debt collector begins to pursue you and your debt is reported to the credit bureaus. The presence of a debt in collections, regardless of where it came from, is enough to hurt your credit score. Delinquent payments, overdrafts, and failing to repay a credit builder system can also hurt your credit.