I was told paying "in full" or "as agreed" gets your a score booster. And that "settling debt" for less than is originally owed will negatively afect your score.
See here from k karma:
"When a debt is settled, a creditor updates your credit report to show a status of “settled” or “paid settled.” While a "settled" status is slightly better than an "unpaid" status, any payment status other than “paid as agreed” or paid in full” can damage your credit."
However I am seeing on this board that people posting are expecting a score BOOST when they settle, and so I see people settling...
I am confused.
Should I settle my debt If I do not have the cash? I do not want my score to go *down*.
Others who are more expert than I may chime in, but here is what I have learned: The most important part is that it is reporting a zero balance. If there's a balance with the original creditor and it's updating every month it's working against your aggregate utilization, which is why when it updates to zero people sometimes see a score increase. My understanding of the settled for less or paid in full doesn't effect point gain or loss, it just looks better to in underwriting if it says paid in full.
Thanks for the reply
For context, I have an "open" account since 2018 with Portfolio Recovery from Capital One CC ~$2k which I cannot afford right now.
I am not sure if I should try to PIF or settle but I do need as big a boost as I can get for my extremely low score (6's).
If I try to settle I do not want to risk my score going lower. If I settle can I get it wiped off after being paid?