I don’t know if there’s anyone who can give you an exact answer. FICO, the company which creates the credit score, keeps the exact formula secret.  If you can’t make even minimum payments, then each missed or late payment is a negative mark on your credit report that will stay on your report and affect your score for seven years. If the credit card company accepts a settlement and charges off the rest of the balance, that will also create a negative item that will affect your score for seven years.

Your best action as far as future credit worthiness is concerned, is to make at least a minimum payment each month on time.  If you can’t even do that, my gut feeling is that it will be better to get this over with as soon as possible by taking a settlement, so that the account is marked settled and closed, rather than dragging out your missed and late payments for months or years.  However, this opinion is not based on any secret knowledge of credit score methods.

Also, where would you get the money to settle the account, if you can’t even make the minimum monthly payment?  If that is going to be another loan, you’d better be darn sure that you can make those payments on time.