If possible, it’s better to pay off your debts than to settle them. Attempting to reach a settlement usually requires that you miss multiple monthly payments and default on your account, damaging your credit score and exposing you to creditor lawsuits. In addition, there’s no guarantee that you’ll be able to reach a settlement at the end of the process. And even if you do, your credit report will show that the account was settled for less than the full balance, further damaging your score.