How Important are Credit Report Account Descriptions

[UpMyScore]

I had a B of A credit card that I settled for less than the full amount back in Dec 2007. Equifax shows status as Pays account as agreed and Experian shows status as Paid in settlement.

Equifax
Descriptions:
* Account paid for less than full balance
* Closed or paid account / zero balance

Experian
Descriptions:
* Account legally paid in full for less than full balance.


Since I am wet behind the ear at rebuilding my credit score, I wonder..

1) How bad is this account affecting my credit score?

2) Is there anything I can do with this bad account to improve my credit score?

[UpMyScore]

Looking further at my report, I see that Rooms2Go account which we settled shows a status of Bad debt/collection, which can't be good.