When the creditor/debt collector accepts payment, regardless of its amount, as satisfaction of the debt, the current status must be updated to paid.
However, they have the option to additionally post information related to the means of satisfaction, if less than the full amount. It doesnt matter what adverse item has been reported along the way, such as a judgment or collection, the ultimate reporting is of satisfaction of the debt behind the reporting.
That additional special comment informing others that they accepted less than the full debt as its satisfaction is never a positive comment upon a manual review of a credit report. I tells others that, in the past, you did not fully pay all debt you incurred. So future creditors might infer that your history could result in a loss of their investment if they grant new credit.
From a credit report perspective, if that special comment is not reported, then your report will appear the same as if the debt had been satified by payment in full.
Thus, when negotiating a settlement, it is advisable to get their agreement not to report that additional special comment.
