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Yes, it should reflect as paid as agreed. Sometimes it may take 30 days from when you officially paid and the payment posted to your account for it to reflect on your credit report. In addition, did you arrange to have it reported as "Paid as Agreed" as a part of your settlement deal rather than it being reported to CAs as "Paid Settlement Account" or any reference ot a settlement because it will not do much for your credit score. If you did not, you should have requested such terms along with "reaging" or requesting "full deltion"the account to wipe out any reports of delinquencies and reflect as paid in goodwill once you made your good faith payment to settle even if the account was closed afterwards. If you did not request "reaging" or "full deletion" of the account from your credit report initially, I would still make this request in writing and send the request via certified or return receipt mail.
Its really more an issue of where the deck chairs are sitting rather than an issue of substance.
Current status is a snapshot only of .... current status. it is a code that can reflect either delinquency or payment status.
Before the account is paid, the current status would record the current level of account delinquency, presumably in this case, 120 late.
Upon satisfaction of the debt, the old current delinquency status is over-written by the new, Paid, status.
Override of prior delinquency status with payment status does not remove the delinquency status prior to payment from your CR.
It is shifted over to a code called your Payment rating, and is also retained in your payment history profile.
Most commercial credit reports often just reference a status without specifying which actual reporting code is being referenced.
Bottom line is that it is not contradictory for an account to show both paid current status and a prior delinquency level.
The 120-late is almost assuredly extracted from your current Payment Rating.