The guide, regarding FICO scoring, to follow, in my opinion, is not payment or non-payment of debt, or payment in full, or settled for less than the full amount,. That debt is not what FIICO scoring is all about.
FICO is primarily about timely payment of debt when owed , not what remains unpaid, or how or when it was paid.
It is the baggage, in the form of delinquencies and derogs along the path of the debt. The baggage can be one or ,more or monthly delinquencies on the OC accouint, a CO done by the OC. or a CA reported by a debt collector.
These are separate and cumulative.
Throwing each item of baggage from the train is dependent on it becoming 7 or 7 1/2 years old, depending on its type of derog. FCRA 605(a)
Not paying a CO, paying it for tthe fulll amount, or settling for less than the charged-off amount, is not something that FICO scores.
So why bother to pay? Because of possible future FICO or legal impacts. Unpaid debt remains, forever. And unpaid COs can lead to collections, which are compound derogs which, if posted, will further drag down your score. and then require independent PFD or GW deletion requests to either/or the OC or CA to address its credot report deletion, if still within 7 years plus 180 days from the DOFD on the OC account. They can continue to be reported to your CR, as long as the debt is not legally discharged.
Then the issue of legal action. If the debt is still within your state statute of limiations for its legal collection, then regardless of any credit reporting isues, it may still be within the legal period where, if they sue. you cannot prove a successful SOL defense.
