3 Thoughts on what is the difference in settling an account or paying in full as far as your credit score goes?
  1. Reply
    Dixie Darlin'
    August 29, 2011 at 7:49 am

    “Settled” is still considered a negative on your credit report, it will be reported for 7 years.

  2. Reply
    August 29, 2011 at 8:32 am

    Settling means you are not paying the creditor all the money that you owe them. Therefore, you have still not fulfilled your obligation and that will reflect badly on your credit report.

  3. Reply
    August 29, 2011 at 9:06 am

    If you settle a current, active credit card account, it will show on your credit report as a charge off/settled — a negative.

    If this is defaulted debt that has already been charged off, paying won’t help your score. The damage is already done and it will take the balance of the 7 year reporting period for the negative to age off, whether paid in full or not at all.

    You may as well settle derogatory items for as little as possible. The difference between paid and settled is very, very minor. Many creditors actually view it as the same.

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