Reduced settlement and credit score

mrsdiy

Hi everyone

Wonder if anyone can help me. I am in the middle of trying to arrange a reduced settlement fee on an old loan.my request in writing asked that they will clear it on a credit reference as full and final paid but im wondering if it will still be marked against me on my credit score. does anyone know if it will make it worse.

Tixy

Hi and welcome to the forum

Does the debt currently show as defaulted on your credit files?

If so then the account and default will continue to show for 6 years from the default date on file. But will show that you have settled the debt and that no money is outstanding.
Once the default is 6 years old the whole record of the debt ever existing drops off your credit file.

It won't make your file look any worse than having a unsatisfied default.