Settlement vs. Pay In Full

Hi

Your payments towards the debt account will definitely improve your credit ratings. If you can pay it in full, you will see your credit improving faster.

The status "settled" will put a negative impact in your file. Your future lenders will understand that you had difficulties in paying off the past accounts and arranged a settlement amount with them. Due to this, they might become leary of extending new credit to you.

Be sure that your credit accounts are reported as "paid in full" or "paid" in the file. Don't have them reported as "settled"

Since your accounts are with collection agencies, they will be reported as "Paid collections" after the accounts are paid off. Though it is a negative remark, but it will still leave a comparatively positive impact than being in collections and not paid.

Gone_cuttin, curlycarl is right about having the accounts reported as "paid in full" or "paid as agreed." One VERY IMPORTANT thing though: If you decide to settle, be sure to get an agreement IN WRITING, not over the phone, etc., that says they will report it as "paid in full." If you do not get this in writing before paying, you have no proof if they do in fact report your account as settled.

Also, as curlycarl states, this will be a paid collection account. While it should improve your credit, you won't see "A+" credit probably until it falls off of your credit report completely.

Gone_Cuttin

Take my suggestion as well as of dmj210. Go ahead and pay off the accounts. You will definitely see your credit improved from what it is at present.

If the collection agency reports to the CBR agencies and they do not report any satisfactory remark but keep it negative that is bad. Not all collection agencies report to CBR's though. The letter is the most important thing. You can send that in yourself to correct any deragotory remark that isn't corrected by a CA.