If you reach an agreement with the creditor, regardless of the amount they agree as satisfaction of the debt, the debt will be reported as paid.
However,the creditor has the option to additionally report that the debt was settled for less than the full amount.
You dont want that additional statement, as it informs others that the creditor took a loss in their dealing with you.
You have three basis options.
First, pay in full, and thus no statement of paid for less can be reported. However, you obviously dont get any score improvement.
Second is to offer a pay for deletion (PFD), where your payment is contingent upon their agreement to delete the derogatory reporting. That both satisfies the dect, and removes the adverse reporting. The ultimate win-win is to obtain both their agreement to settle for less, and to delete the adverse reporting. However, getting both CR deletion and a settlement for less is asking for two concessions, and may be tought to get. Best shot at deletion, if that is your primary goal, is to offer a PFD for the full amount of the debt. How large is the debt?
As a fall-back, the next best to acceptance of a PFD is to get a settlement for less, with their agreement not to report paid/settled for less to the CRA.
You save $$.
Absent that additional reportting, the account will then appear in your CR the same as if it had been paid in full.
