If you can't repay your debt, it's often passed to a debt collection agency. These agencies can use your credit report to understand your financial situation and decide how to collect the money owed.
How this affects your score
Debt collector searches are classed as hard searches. If you've had more than 1 hard search in 6 months, this can make a dent in your score. These searches imply you're too reliant on credit and can affect your chances of getting a 'yes' when you next apply for credit. Unlike credit applications, a debt collector's search is removed from your report after 2 years.