My home equity was discharged in my bankruptcy. If I settle w/ bank will it hurt my credit?

my home equity line of credit and mortgage were discharged in my bankruptcy 2 years ago. I have paid both on time ever since then. My mortgage is reporting positively to the credit bureaus and my home equity isn't reporting at all. I am in the process of selling my house and buying another house so I called the bank that my home equity line of credit is with to ask if they would start reporting, to help build my credit, and they told me that they couldn't. They also told me that they would agree to settle with me for a lesser amount if I paid in full. If I settle with the bank and pay it off in full at the settled amount will this affect my credit in a negative way or hurt me when trying to get this new home loan? Even though they aren't reporting to the credit bureaus at all? Will it hurt my credit like a short sale would? PLEASE HELP!

Credit reporting is supposed to be based on facts. If the bank is forced to settle with you for an amount less than the payoff, it should affect your credit in a negative way. If you pay in full but you are late, that's what it's the report should reflect. With an accurate set of facts, it's up to the prospective new lender to decide whether or not they are willing to take the risk of lending to you.

If a bank refuses to report a loan, the fact is, there are no facts. Therefore that should have a neutral effect on your credit.