I've contacted one of my credit card companies regarding my outstanding balance. This card is currently 180 days late, soon to be in charge off status. (so they told me) They offered a 50% settlement - before I even asked. I now have a few questions. If I settle, my credit report will say 'settled for a lesser amount". If I pay it in full, it will show late, but paid in full. If I didn't pay it at all, it would show charge off. I know that paying it in full will not remove the lates, but will paying it in full raise my score at all, verses a charge off or settled account? Does settled and charge off tank your score equally or is one worse than the other?
I am not 100% sure, but I believe the paid in full will be better for your credit because typically late payments show for a few years but that's about it, and your card will likely show as open. Example 4-5 years ago I was 5 months late because of being laid off, they offered a settlement for half the balance also, I declined and I paid it off. It showed the late payment for a few years, but now it shows as current and is actually one of my most helpful accounts for my credit score as it is my oldest also. On the other hand if you settle it, it will show as setteled for less then the full balance, they will usually close the account also, and it will stay showing that is how the account ended for the 7 years.
