Once a debt is discharged, regardlless of whether it is paid in full or settled for less than the full amount, the creditor is required to update the current stutus to paid, and the current balance to $0.
They can, at their discretion, also choose to report the special comment of paid/settled for less, which adds the additional info that you did not pay the full debt.
That does not effect your score, but is a derogatory remark, as it informs others that you failed to pay the entire debt you obligated, and thus the creditor took a loss in lending to you. That may or may not be a factor in future decision making by creditors in making a lending dettermiation.
You can, when making the settlement offer, include as a contingency that they agree not to report settled for less to the CRAs, thus making the credit reporting appear the same as if you had paid in full.
As a secondary factor, the IRS considers debt that is volunttarilly cancelled by a creditor to have effectively become "income" to the consumer, and if $600 or more, the creditor is required to send notice (form 1099c) of the settlement difference amount to the IRS and to the consumer. The consumer may then, unless subject to an exempltion, be obligated to declare that amount in their next tax filing.
