Credit report after settling

If you settle the debt with the credit card companies, the debt will either get reflected in your credit report as "settled for less" or "paid as agreed".

Every credit card company is different. Capital one reports as "settled with an outstanding balance"

How bad does that look on your report?

depends

Anything less than paid as agreed has a derogatory affect...how much it affects your credit depends and is different for each person...so for a person that has many accounts that are in good standing and only 1 derog, it may not be as bad as a person who has only 3 accounts and 1 of them is derogatory.

Any comment on your credit report is nothing more than a comment; it has no affect on your credit score. This is because your credit score is a mathimatical formula that can only take into account the letter and number associated with the status of your account. When your account is in third party collections, this type of account will be an I-9 (charge off/ collections account). When you settle the debt, it will most likely change to a 5 which means balance paid/ $ 0balance. The comment is just that and can not factor into the status code.

If you look at a detailed credit report that shows account column status, you will see the column I am speaking of. Mortgage accounts have a M infront of them; autos depends, unsecured debts can have multiple alphabetical variables depending on how the account was opend.

Settling the debt also helps your credit score because it lowers the debt to income ratio. DTI effects your score by 1/3.

You always want to settle your debt.