If the debt owner will accept less than the full amount as settlement of the debt, then the debt is discharged.
That requires the collection to be promptly updated to show paid, $0 balance, and closed, the same as if paid in full.
However, if paid for less, they have the option to record that fact in the consumer's credit file by adding the special comment of paid/settled for less.
Presence of that special comment advises others who do a manual review that you have a history of not paying the entire debt that you obligated, which is never a favorable comment.
You can, as part of a settlement negotiation, include as a condition that they agree not to report any comments or status that reflects the debt was paid for less than its full amount. The reporting will then appear the same in a manual review as if it were paid in full.
