How does a Partial Settlement affect future credit?

National_Debtline

Hello there,

We asked Experian what their take on partial settlements is. Here is their reply:

'The outstanding balance will be changed to zero to reflect that no money is due; but the P flag will show that it was not paid in full. We do not currently believe such flags are usually used in credit scoring, but they could well be included in a lender’s underwriting policy rules. This could mean that the appearance of a flag on a report would trigger a manual review of the application, where the additional information could then be considered by one of the lender’s underwriting experts.

Of course, this is only really going to apply should you apply for credit within the six years prior to the settlement falling off your file. Do also bear in mind that your credit worthiness is only part of what makes up a lender's lending decision.

Best wishes,

David @ National Debtline.

shireknight

If a debt has already fallen off your credit file and you make a partial settlement on it won't that make it reappear again for a full six years starting from the date you made the settlement payment?

glentoran99

No it will drop off 6 years from date of default