settled for less than balance - what is effect on fico?

[Anonymous]

If you settle your balance for less than the total amount owed, is there a big impact on your FICO?

[John060675]

From my understanding there is a difference.  However, I am not sure how much of a difference there is.  I am sure someone else on the Forum can answer that.

I just wanted to give my opinion on something.  You should not pay the collection until they agree to a PFD.  You probably will not be able to settle for less and get this option, but I wish so much that I would have done this in my past.  You have leverage now, since you have something they want (money).  If you pay, then they will more than likely not be as willing to work with you.

Just my thought.  Good luck.

[CreditBob]

No, it does not have any different impact on your fico score. Less than paid or settled for less than the balance only tells future lenders what took place. Other than that you would have to contact the mediator on this site for Fair Isaac aka MYFICO. Also click on credit education & you will see the few things in the pie chart that make up the score.