Rehma Kredi
RK is a respected credit advisory service operating nationwide in India, committed to aiding clients in attaining favorable credit standings and financial autonomy.
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Monitor Your Payments
If you’ve settled the debt in installments, keep track of your payments until the full amount is paid off. Reduce your monthly debt payments (excluding mortgage payments) to no more than 15% to 20% of your take–home pay.
Request Updated Status
Once you’ve completed the settlement payments, contact the creditor to ensure that they update your credit report to reflect the final status, which could be “Settled” or “Paid in Full.”
Post (WO) Settled & Settled
What does ‘settled’ and “Post WO Settled” mean on your credit report?
‘Settled’ means that you’ve paid your debt without default. When you miss several payments consecutively, or sometimes intermittently during the course of a loan term, for example, the lender may add a default marker to your credit report.
This is intended to warn other potential lenders that you’ve been unable to keep up with your contractual obligations, and it can have a seriously negative effect on your credit score. So seeing ‘settled’ in your credit file is not a good indication that you’ve repaid the loan by waiving a part of the outstanding. It also indicate that the financial institution has lost a significant amount by lending you the loan. A ‘settled’ status does not look good on your credit report and reflects negative to other potential lenders in the future.
If you only miss an occasional payment, a creditor may not mark a default – it’s typically when two or more payments are missed that a default is recorded, and this makes adverse affect on the credit health. If you see a ‘settled’ status code, this means that your creditor has accepted an offer of final settlement that is less than the full amount owed. This does negatively affect your credit score, as it shows you have failed to pay the full amount required.
Never settle the loan and if you had to take the settlement due to unforeseen reasons. Then come back at a later time when everything is good and repay every penny back to the bank.
“Post WO Settled”
A loan account that was previously marked as “written off” (meaning the lender considered it unrecoverable) is now marked as “settled” because you have reached an agreement with the lender to pay a portion of the outstanding amount, or have fully repaid the debt.
