Pay in full or settlement for less will look the same in your credit report, which is usually all that a creditor will see when it comes to paid debts, provided the party does not report the additional special comment of settled for less.
If you cannot get a PFD, then next best thing is to save $ and get a settlement for less, but avoid the showing in your credit report that it was a settlement for less.
All that is required when a debt is paid is that the debt collector close their collecttion and update the debt balance to $0.
If the collection is only an assignment, then they are also required to notify the OC of satisfaction of the debt, requring the OC to also update to $0 debt balance in their reporting. Recording that the debt was settled for less than its full amount is optional reporting, and if that special comment is omitted, the consumer's credit report will then look the same as if the debt were paid in full.
While that does not have direct scoring advantage, it may be a huge factor in a manual review. Addition of notice that the debt was settleed for less informs others that you have a history of not paying your entire obligated debt, and thus that if you repear that pattern, lending to you will result in a loss. Creditors dont lend to lose. It could thus be basis fo denial of new credit.
Thus, as part of a settlement negotiation, if you can secure agreement not to make any reporting of setlted/paid for less, you will gain removal discharge of the debt and same money without incurring possible negative impacts of not having paid the full debt.
