Glossary
Settled Account
A loan closed by paying less than the full amount owed, recorded negatively on your credit report.
What it means
When a borrower and lender agree to close a loan for a reduced sum, the account is marked 'settled' rather than 'closed'. It stays on the credit report for years and signals to future lenders that the full obligation was not met.
If you can, pay the full amount and get the status changed to closed, or obtain a no-dues certificate. Some lenders update the bureau after full payment on request.
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