“Paid in full” charged off account is better than “settled for less than owed”


Dear Experian,

If you have a charged off account, is it better for it to show “paid in full” or “settled for less?”



Dear JMN,

It is always better for an account to show it was paid in full than to show it was settled for less than the full balance.

A status of “settled for less than full balance” means that you negotiated repayment of the loan for less than was actually owed. Any time you fail to repay the full amount you owe it will be considered negative.

When a charged off account is paid, the balance will be updated to show that it is no longer past due. However, the account entry will still show the amount that was initially charged off as a loss and the payment history of the account, including previous late payments.

Thanks for asking.

The Ask Experian team