settle with credit card companies to improve my credit?

I am trying to settle with the credit card companies that I owe money to because I need to improve my credit quickly (I want to buy a house in under 2 years). If I do this, will it show that I still owe the remaining balance on my credit report? I settled with one over 2 months ago for about 60% of the amount owed. Now my credit report says that I still owe some money to this company. Is this how it works or should I dispute it?

Public Comments

1. It should show your account is settled, as the company agreed it was. However, check if your credit cards or personal loans were taken out before 1 April 2007. If so you may use the law to get them cancelled and then have nothing to pay back. Visit www.bdebtfree.info and they will help you with this. Once your accounts are cancelled your credit record should show that nothing is owed to these companies.
2. Credit Reports are funny things. A lot of times it will specify the debt was 'settled' in full or 'paid' in full. If something still appears on your credit report after you have settled it, than its in issue you should take up with the credit bureaus. You can send them some sort of documentation proving that the debt is still not owed. I didn't have much credit for years and the credit I did have wasn't very good. I believe it was about a 620. What I did was got a secured credit card, ran up the balance every month and paid it off. After six months I was over a 700. What a mortgage company is going to look at is you 'debt to credit' ration. Meaning if you have $1,000 dollars of debt and $2,000 of credit than your ration would be 50%. If you could get that number closer to 20 or 25% you should be in good shape. Good Luck!
3. If you do not settle at 100 cents on the dollar, it will have a negative impact on your credit score. You cannot have it both ways, to settle your debts at a reduced amount and not have to take a hit on your score so you can go out and run up more debt.