Settlement vs Paid in full?

[Anonymous]

Hoping someone can help me out with this question.
I'm down to my last two collections accounts. One is with Calvary Portfolio and the other is with Portfolio Recovery, I've tried the PFD route the last couple of months with no success. What would be the long term implication if I where to accept a settlement amount vs paying in full. Hoping to app for mortgage in 2 years and these won't fall off for another 4 years.

[Anonymous]

They will show the same impact on your fico score as pif. But they can put a note saying it was settled for less than amount owed which can raise question.

[RobertEG]

The next best thing to a PFD is a settlement for less, provided they agree not to report that you settled for less.

Whether you PIF or settle for less, the debt is discharged, and thus they must update the balance to $0.

As stated, they can optionally include a special comment if the debt was settled for less.

As part of a settlement offer, you can request that they make no reporting that the debt was paid/settled for less.

If agreed, their reporting will appear the same as if you had paid in full.

The inclusion of a comment that the debt was settled for less is always an unfavorable comment, as it advises others that you did not pay the enitire debt obligation.

That means the creditor tooks a loss in having extended credit to you.

Upon seeing that comment in any manual review, it could dissuade a creditor from lending to you under the possibility that you might repeat such a practice