It will be listed as a negative. While it won't be as bad as not paying it off at all, it will not be as good as paying it off in full. Some say that regardless of if you pay them or not, your scores are already screwed over. By the time a debt collection agency took over, your scores are unchangeable in most cases so it likely won't help your scores at all.
I did this once and nothing changed because I was already late several months. I think I didn't make a payment on one card for nearly 18 months. Even after I paid it off, my scores stayed the same.
jerald: It will be listed as a negative. While it won't be as bad as not paying it off at all, it will not be as good as paying it off in full. Some say that regardless of if you pay them or not, your scores are already screwed over. By the time a debt collection agency took over, your scores are unchangeable in most cases so it likely won't help your scores at all.
This is correct. The issue people run into is that by the time a settlement is offered, a collection agency already has the bill and it is written off by the credit provider so they will get some return for their loss. Most don't like to wait to turn it over either. I think some will only give you 3 months max to make payments before they hand things over.