A debt that has become delinquent has a Current Status of delinquency, which can be either reported as a level of monthly delinquency, such as 90-late, or if serously delinquent and not expected to be paid, as a charge-off.
The Current Status is simply a snapshot of the status as of their last reporting. When a debt is paid, the creditor is required to "promptly" update the debt balance to $0 and the current status to paid. FCRA 623(a)(2). If satisfaction of the debt is agreed as a settlement for less than the full debt, the creditor can also report the special comment that clarifies the paid status as being for less than the full amount of the debt, but the debt is still discharged and its balance is $0.
An agreement to delete any adverse reporting to a CRA, such as the charge-off, is separate.
The Paid or Paid/settled for less current status is still accurate, and is not disputable.
While CRA policy instructs creditors not to delete based on payment of the debt, if the creditor agrees prior to payment to deletion, it is a contract term that becomes legally binding once the consumer complies by paying the debt.
Yes, you can bring civil action against the creditor for breach of contract (written or oral, as the case may be) if you pay and they subsequently fail to comply with their agreement. It is a matter civil contract to be heard and decided by the courts.
I would advise sending an intent to sue letter, notifying them of their contract agreement, and giving them one reporting cycle to comply with their agreement.
