By settling your debt, your creditors will need to write off a portion of your debt (the difference between your balance and the partial settlement that we agree). This will show on your credit file, usually alongside a marker that says ‘partial settlement’, so lenders will be able to see that you have not paid the debt in full. This on its own may not prevent you from getting credit, but some lenders may have additional checks in place where this flag is identified.
If the account has already defaulted, settling it will not remove the default. This will stay on your credit file for 6 years from the date that the default was issued.