How does settling effect credit score - want to pay off my credit cards

How does settling effect credit score? I have a few credit cards with balances large balances on them. I'm now in a position where I can pay these credit card balances off in full. I was thinking about making a partial payment for settling the credit account and was wondering how it would effect credit score. I may want to get a mortgage in the future so I don't want my credit score to fall. Also will the settled account show a delinquent account on credit file if I make a partial payment?

Your question is how does settling effect credit score. There are two possible scenarios. If you settle a credit account in full then this will boost your credit score. By settling your credit account in full you are showing the credit reference agencies that you have the ability and the commitment to pay back the amount in FULL. The best way to increase your credit score would be to take out 50% of your credit limit and then slightly more than the minimum payment and then settle the account in full within 12 months. Banks like to see this because they make money when you make small payments and when you eventually settle they get their money back.

The second scenario is partial settlement which means you offer the bank about 70% of the full amount borrowed. Banks are not obliged to accept these settlement proposals. When you do this your credit report will show a partial settlement and it will almost certainly effect your credit score. If you have really really poor credit and have defaulted and then you settle you might experience a slight rise because you paid a chunk of your debt off. If you have good credit your score will definitely go down.

If you're thinking about getting a mortgage in the future it is better to settle credit account in full. Settling effects credit score positively if it is settled in full. If you make a partial settlement your credit score will fall and it is unlikely you'll get a mortgage - would you lend money to people who don't pay the full amount back! If you make a partial settlement you might get a mortgage but it will have a high APR. If you have the money you should settle in full to show the credit reference agency that you can manage your finances properly.

Thanks, much clearer, I think I'll settle in full

Thanks, makes sense!

To make sure you get a mortgage in the future pay your balance in full. This will soon reflect in your credit score for good and then you can approach the lender with confidence. Partial settlement is a good advise but as told by other members, it is not good for your future mortgage plans.