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Posted in Auto Loans
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movingup2014

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Settled for less than amount owed - If paid in full, how will this affect my credit score?
Hi All!
I had an auto loan through CarMax and it shows on my report as "settled for amount less than owed" I paid $100 on it last night and I owe $247. How much do you think my credit score will increase once it is paid in full and is reported to the credit bureaus as such?

I am hoping to get a car loan so I know that its really important that this is reflected positively on my credit.

My score was 572 a month ago. I paid one of my cards down ($400 limit / $381 balance) to a $20 balance & my score has increased 24 points according to Transunion.

Thank you all in advance for sharing your input & experience.

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Top Contributor
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Unfortunately, nobody can say how many points this will affect your score, because there are so many factors involved.  If this account shows any late payments, collection status or "settled for less" language, it will always be a mark against you.  However paid is better than unpaid, if that is any consolation.  You can try to get CarMax to agree IN WRITING to delete the account entirely once it is paid in full (assuming it is a negative account).  Other than that, it will stay on your credit report for 7 & 1/2 years from date you pay it off.  

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