It is always better to pay your debt off in full if possible.
The account will be reported to the credit bureaus as “settled” or “account paid in full for less than the full balance.” Any time you don’t repay the full amount owed, it will have a negative effect on credit scores.
Is it better to pay a credit card in full or settle?
While a “Settled” status is slightly better than an “Unpaid” status, any payment status other than “Paid as agreed” or Paid in full” can damage your credit. Because you aren’t paying your full balance as agreed, debt settlement will have a negative impact on your credit score.
Should I pay off my collections?
Paying Off Collections
Unfortunately, simply paying a collection account without getting it removed often won’t improve your credit scores. With few exceptions, as long as a collection account is listed on your credit reports, it’ll have a negative impact on your credit scores.
What percentage should I offer to settle debt?
Depending on the creditor and how much you owe, you may be able to settle for anywhere from 30% to 70% of the outstanding balance of your debt. Typically, a creditor will only consider a settlement when an account is delinquent, but you should keep in mind that they’re not required to accept your offer.
What’s the difference between settlement and paid in full?
A account listed as “paid in full” means you paid off the entire amount due on a loan. “Settled in full” means you negotiated with the lender to pay off some amount less than what he gave you. This might happen on a an unsecured line, such as a credit card.