The difference between ‘settled’ and ‘satisfied’ in a credit report (2024)

What are the differences between 'settled' and 'satisfied' on my credit report?

When you look at your credit report, you’ll see various status codes marked against individual loans and other borrowing. These indicate the extent to which you’ve repaid your creditors, whether there were any defaults, and if the account has now been closed.

You may also have noticed that two codes sound fairly similar, and relate to debts which have been repaid – ‘settled’ and ‘satisfied.’ So what do these codes mean, and what’s the difference between them?

What does ‘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 a good indication that you’ve repaid in full without any adverse issues.

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.

If you see a ‘partially 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.

The difference between ‘settled’ and ‘satisfied’ in a credit report (2024)

FAQs

The difference between ‘settled’ and ‘satisfied’ in a credit report? ›

a settled debt will disappear from your credit record six years after the settlement date. a satisfied debt will disappear more quickly, as it drops off six years after the default debt.

What is the difference between satisfied and settled credit report? ›

A significant difference exists between these two terms: Settled – This is when you voluntarily close your account by repaying the full amount owed. Satisfied – When you repay the debt in full after the lender closes your account due to default for non-payment.

What is the difference between settled and paid in full on credit report? ›

Settling an account rather than paying it in full and on time signals that you're a risky borrower, which will be reflected in your credit score. Additionally, working with a debt settlement company often means halting payments to your creditor in order to gain negotiation leverage.

What does it mean when a debt is satisfied? ›

Key Takeaways. Satisfaction and release states that a consumer has paid the full amount of debt that was owed to a creditor under a court judgment. A satisfaction and release prevents creditors from attempting to recover more money from the borrower or consumer.

What does it mean when your credit is settled? ›

What does '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.

What does "satisfied" mean on your credit report? ›

Satisfied refers to a default or CCJ that has been issued, but is fully paid off so no further attempts to reclaim money owed are required. Once a Notice of Default has been served, the borrower ceases to be a customer, instead becoming a debtor and the account will be closed automatically.

What does satisfied mean on Experian? ›

Repayment. Try and pay off what you owe as soon as possible. Once you've achieved this, the default will be marked as 'satisfied' on your credit report, which looks better to lenders.

Should I pay my collection in full or settle? ›

Summary: Ultimately, it's better to pay off a debt in full than settle. This will look better on your credit report and help you avoid a lawsuit. If you can't afford to pay off your debt fully, debt settlement is still a good option.

Is settled in full good on credit report? ›

It is always better to pay off your debt in full if possible. While settling an account won't damage your credit as much as not paying at all, a status of "settled" on your credit report is still considered negative.

Does settled mean paid? ›

Although paying your debts is a good thing, a settlement agreement means you paid less than what you actually owed the creditor.

Is settled better than satisfied? ›

If all payments were made on time, then a settled debt is great for your credit score. It shows you borrowed money and repaid it on time – just what future lenders like to see. But if the settled debt has late payments or arrangement to pay markers, these are going to be showing on your credit record for a long while.

What does it mean if a judgement is satisfied? ›

A satisfaction of judgment is a document signed by a judgment creditor and generally filed with the court, indicating that a judgment has been paid in full.

How long does a satisfied default stay on your credit file? ›

A default will appear on your credit file for six years, even if you pay off the debt in full. This means it'll be harder to get credit cards, loans or bank accounts. You may also find it harder to get other types of credit such as mortgages and even mobile phone contracts.

What happens when a debt is settled? ›

Once you settle a debt, the debt collector or creditor will report your account as settled or partially paid. It will stop negatively reporting your account to the credit reporting bureaus, but the settlement will remain on your credit report for seven years.

What does it mean when a collection is settled? ›

In a Nutshell. Debt settlement is a practice that allows you to pay a lump sum that's typically less than the amount you owe to resolve, or “settle,” your debt. It's a service that's typically offered by third-party companies that claim to reduce your debt by negotiating a settlement with your creditor.

How bad is settled debt? ›

Debt settlement typically has a negative impact on your credit score. The exact impact depends on factors like the current condition of your credit, the reporting practices of your creditors, the size of the debts being settled, and whether your other debts are in good standing.

Is paid in full better than settled? ›

Settling has more of a negative impact on your credit than paying in full. When you settle, this shows up on your credit report and signals to lenders that you have a history of not repaying the full amount of your loan. This can lower your score and will stay on your credit report for six years.

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