credit report has collection

[Sarah Jones]

My credit report has a collection that is about $380 .. it is not medical it is a spritn bill.. it was posted recently 3 months ago so it is hurting my credit... im trying to buy a house.. they want me to settle for $180 but if i settle they will not remove the debt of my credit report they will just update the record to show settled...

1. should i pay it and have it updated? it will probably ding the credit report again but it will show that it is settled for less or somethign .

2. my score is 644 if i dont settle it.. will the loan company let me take the loan.. it is not a medical collection.. some say i have to pay for it otehrwise i will not get approved some say i dont have to pay for it... do i have to pay for it or not? will a bank approve you with a non medical collections?