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Hi I am curious which is better Settlement or Paid in full for credit card debts that have been charged off. I do want to purchase a house in the future and I wanted to know if I settled a payment rather than paying in full, which would be better or is there a difference or does it not which methos as long as its paid? Thanks for reading!
paid in full better than paid as settled
Hi Jennifer,
It is always better to pay off the debt in full after it has gone to collections. If you pay only a part of the debt through settlement, the debt may tend to come back after some time.
Along with the agreement to pay, you can also request the collection agency to agree to a "Pay for delete" agreement (PFD). With PFD, your account will get reported as "Paid in Full" if you pay the full amount. Otherwise, your account gets reported as "Paid as Settled" if the due amount is paid a settled.
Hope this helps :)
Regards,
Aaron