if i do a settlement for my loan will it make a difference on my credit score?

Answer 1

It will likely have a flag on that account that it was settled for less than the full amount.

I have no idea if that particular flag actually impacts the rating or not.

But assuming it's already in collection/charge-off status, paying it off will likely actually drop your score temporarily, since you just brought the date of last activity to be more current.

Ultimately, however, it will eventually get up higher than it is today.

Just make sure you get your settlement offer in writing BEFORE you send them one penny. Otherwise, they'll pretend they never made that offer, and try to collect the rest later. They pull that crap all the time. And don't lose that piece of paper for at least 2-3 years, just to be safe.

Answer 2

If you have any leverage in this negotiation, you can tell them you want it marked "paid as agreed."