They will know because the creditor reports it to them.
You will not get anywhere by calling and telling them. But you can send proof of your payment in full via certified mail. Request that they send a complete credit report showing the accounts paid, or settled, whichever is correct.
There are many different kinds of finance professionals who can read and help you interpret a credit report. You can post your questions here also. Instead of relying on someone else, why not do a little research on the bureau websites (www.equifax.com www.experian.com www.transunion.com and at www.ftc.gov ) You can probably find the answers to all your questions at those locations.
You need to get the release from the courts and send it to the credit reporting agency to ask for it to be removed.