It'll definitely show up on your credit report. The key is a lot of lenders supposedly will just look past it. Ultimately it's up to them if you get a loan or not, not just based on the number alone.
One caveat, you definitely want to contest the debt in writing regularly. If it goes away because the collector failed to respond you are fine. If it goes away because they "forgive" the debt, its seen as income by the IRS and you will pay taxes on it. So imagine the tax bill if 200K of "income" is added to your taxes one year.