If I pay a collection

[annm]

That is reporting for some $900 and I pay a settled amount of $500 am I right in assuming this will reduce my utilization by that $900 and it will be updated with a 0 balance, "less than full amount" ? 

[anca21bi]

I think utilization is only from open revolving or installment accounts. The OC should be reporting 0 balance if the CA is reporting a balance and that should be reporting as a collection account. It will be separate from utilization.
Others with more experience will offer more better advice.

[dursty87]

Collections don't count into your utilization. However a closed account that is being reported by the OC as still owing a balance will count towards your utilization as debt owed.

[dursty87]

Adding because I'm on mobile and can't edit. The only time the OC account will show a 0 balance ( or should ) is when they have sold the debt and no longer own it.

[RobertEG]

If the OC still owns the debt, they will be reporting the debt balance, and payment will reduce your reported % util if the creditor is still reporting both your CL and debt balance.

If the OC has sold the debt, the balance should already be $0.

If they accept less than the full amount, yes, the debt balance will still be $0, but they have the option of additioally reporting paid/settled for less.

You can request, as a condition for paying, their agreement not to report paid for less.

[annm]

The OC sold the debt to Midland who continues to tack on interest. Original balance was $685 - reporting as closed / $0 from the OC, but Midland updates with a new amount every few months. So this would factor into utilization, right?

[dursty87]

No it won't affect your utilization at all.