The obvious benefit to settling an account is that it is for lower than what is owed. I have a creditor that is willing to settle for half of what is owed, which I can pay today. At this point, I just want the debt to be gone (and the calls to cease, lol). Does it look bad if the account is settled? Will a mortgage lender frown on a settled account as opposed to a paid in full account? Will my score increase any if it is settled?
So what state do you live in? Maybe you don't even owe the debt anymore if the statute of limitations has ran out on the debt. That depends on what state you live in or possibly what state the creditor is located in. If you pay the debt it will reflect negatively on your credit score but on the other hand if you are wanting a home loan the lender will probably require that you pay the debt off before they will lend money. So while paying a debt will most likely lower your score rather than helping it you may be forced to pay in order to get a loan for a home.
