If the account was charged-off -- which I assume it must have been since a collection agency is involved - then the account is already closed. Your credit reports may not explicitly state the word "closed" but it should show as "charged-off".
Once USAA updates the account to reflect payment per your settlement agreement, your reports should reflect 'Settled for less/ Was a Charge-off/ Closed / $0 Balance'. The reflection of a $0 balance is necessary to help your utilization.
@Anonymous wrote:So I finally got a settlement from USAA for my credit card i can afford. However Im worried about the status of the account when its settled. If its not marked as Closed on my credit report then I can't get my revolving utilization percentage down. Does anyone know if by law when its settled are they required to mark it as closed? The debt collector said it was already closed which I know is wrong, every report I have says Open or not closed. Anyone have any idea?
There are a number of ways it could appear in a credit report, but I have a hunch none of them are good. As far as I know they're all long term negatives. I'm not sure of all the terms they use to describe accounts which are settled for less than the amount owed, but "chargeoff" and "settlement" are 2 of them.
As far as your specific questions, if it's closed it will be marked as closed, your limit will not be counted as credit available, and your balance will count against you in computing utilization.
