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Paid and Settled Accounts

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.

Settled Accounts Are Considered Negative

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

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