Credit Advice » Report Advice » Report Details » Paid and Settled Accounts » Settling a Debt Will Hurt Your Credit Score

Settling a Debt Will Hurt Your Credit Score

Dear Experian,

Does it hurt my credit score if I settle my account?

– EWH

Dear EWH,

Yes.

The term “settled” means the lender has agreed to accept a final repayment amount that is less than full repayment of the debt. The account will be shown in your credit report with a status of “settled,” indicating the debt was not paid in full, as originally agreed.

Anytime you do not repay an account in full or as agreed in the original contract it will have a negative effect on credit scores.

Thanks for asking.
– The “Ask Experian” team

Review Your Free Experian Credit Report Today

Good credit begins with knowing where your credit is today. Get started with your free Experian Credit Report, updated every 30 days on sign in. No credit card required.

Get Started for Free

Quiz: Your Holiday Spending Profile

Are you king of the holiday budget, or are you more of a true Scrooge? Test your knowledge of holiday spending and ID theft here.

Ask Experian for Advice

Your privacy and the information collected here.