Settling for less that what you originally owed

A lot depends upon your present financial situation. If you have no other options but to settle the debts, you have to make this move. Thinking about the credit for the future should be a matter of less concern. Your prime objective is to get the debts paid, in case the creditors are trying to sue you and if you are not able to afford the existing interest rates.

Any status with the term "Settled" reflects the credibility in a negative way. The potential lenders will assume that you had problems in paying your past debts and arrange for a settlement with the creditors. They'll feel this can happen with them also. So, there might be a risk in extending credit.

The status can be negotiated with the present creditors. Pay them according to the terms set by you and insist that they report with the bureaus in a fair way. "Paid" or "Paid as Agreed" looks better in the credit copy.