What's the difference between Settled and Satisfied on your Credit Report?
Your Credit Report contains a huge amount of information about you, and how you’ve managed your credit agreements in the past. Different parts of your report will have a different level of influence on how you will be judged by a typical lender, but there are some entries where a small variation can have a big difference.
There are definite similarities between the Settled and Satisfied markers found on Credit Reports, and so they often get confused; and not just because the words themselves are quite similar. In some circ*mstances the two can be interchangeable, but they don’t mean exactly the same thing, and the subtle differences could mean a lot to a prospective lender.
See how different markers appear on your Credit Report
What do Settled and Satisfied mean?
Both markers indicate full payment and closure of an account, but it’s the circ*mstances that lead to this happening that cause the difference:
Settled refers to an account that has been fully paid up and then closed. This could be a loan that’s been paid off or a credit card that has been closed with no outstanding balance. These are the vast majority of accounts, and you should see these markers on any accounts you’ve closed within the last six years.
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. As such the information on the account, such as the remaining balance, won’t be amended at all until the account is marked with a zero balance and a Satisfied marker.
What effect do they have on my score?
The terminology itself does not have an impact on your Credit Rating, but the difference between an account that has been closed voluntarily by repaying any outstanding balance and one that is forced to be closed by a lender due to a default, is significant. Even once a default or CCJ is Satisfied, your score will not improve as a result of this happening and lenders will see the presence of a default or CCJ on your report as clear evidence of you having had trouble making repayments in the past, regardless of whether they have since been paid.
Even once a debt has been satisfied, the Default or CCJ will stay on your credit file for the remainder of the six-year period.
The use of the Settled/Satisfied markers will also depend on which Credit Reference Agency is returning the account information. Equifax for instance does not use a Satisfied marker for credit accounts, even for defaulted accounts they hold – it will simply use the Settled marker once a defaulted account has been fully paid and closed. TransUnion, however, uses both markers when necessary and in line with the criteria outlined above.
What if my credit report says “Partially Satisfied?”
You may also come across a Partially Satisfied marker. These are often placed on defaulted accounts when the lender and borrower have come to an agreement for less than the full outstanding debt to be paid. Like Settled and Satisfied, Partially Satisfied indicates the closure of the account and no further payments would be expected.
CCJs cannot be partially satisfied on Credit Reports: the claimant may accept a lower settlement than the amount in the original judgment, but if the total outstanding debt is not paid, the court will simply keep it marked as Active until the entry is removed.
You can see how your own credit agreements – both open and closed – appear by checking your Credit Report. checkmyfile provides the UK’s most comprehensive Credit Report, with information from three Credit Reference Agencies, not just one. If you haven’t already, you can try checkmyfile free for 30 days, then for just £14.99 a month afterwards, which you can cancel at any time.
Updated on 13 September 2021 by Sam Griffin
FAQs
If you see 'satisfied' against any items on your credit report, it indicates that your creditor has marked a default. You may have missed several payments as previously described, but an unexpected advantage is that this entry should disappear from your credit file sooner than the 'settled' debt.
What does "settled and satisfied" mean on a 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 does it mean if a credit account is settled? ›
A settled account may be seen as proof that you were unable to pay your balance in full. New lenders may look into your full credit report to understand how likely you are to repay any balance they lend to you, so a "Settled" account shows that you were unable to completely repay a balance in the past.
What does satisfied in full mean on credit report? ›
Most settled debts will be listed on your personal credit reports as either "paid off less than full balance" or "settled less than full balance." If you've paid the full amount owed, the account will likely be listed as "paid in full."
How long do satisfied accounts stay on 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.
Can you remove settled accounts from a credit report? ›
Wait. The truth is that there's no way to remove accurate information from your credit reports ahead of schedule. Whether it's missed payments or charge-offs, they'll stay on your credit reports for seven years. Fortunately, settling debt does not mean your credit will be in the gutter during those seven years.
Does a satisfied judgment hurt credit? ›
A satisfaction and release is important because it can help a borrower prove that the debt was paid off, which might help in getting approved for credit in the future. However, a judgment—whether satisfied or unsatisfied—can negatively impact a person's credit report.
How long does a settled account stay on your credit report? ›
How long do settled accounts stay on your credit report? Settled accounts stay on your credit report for seven years from the date of delinquency (the date of the first late payment). The clock starts with the original date of delinquency and won't restart just because you made a payment or settled the debt.
What does it mean if you don t have any settled credit accounts? ›
Settled refers to an account that has been fully paid up and then closed. This could be a loan that's been paid off or a credit card that has been closed with no outstanding balance. These are the vast majority of accounts, and you should see these markers on any accounts you've closed within the last six years.
Is a settled account good? ›
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.
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.
Is it better to be settled or paid in full on credit report? ›
How it affects your credit. According to Latham, a "settled in full" status on your credit report is preferable to "unpaid" or "in default," but it's not great. 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.
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.
What does satisfied account mean? ›
Satisfactory accounts are current or have been paid. This includes installment accounts which have a set borrowed amount with monthly payments. It also includes revolving accounts which have a credit limit with payments due as it is used.
Does settling accounts improve credit score? ›
Debt settlement can eliminate outstanding obligations, but it can negatively impact your credit score. Stronger credit scores may be more significantly impacted by a debt settlement. The best type of debt to settle is a single large obligation that is one to three years past due.
What does a settled account mean? ›
An account settlement generally refers to the payment of an outstanding balance that brings the account balance to zero. It can also refer to the completion of an offset process between two or more parties in an agreement, whether a positive balance remains in any of the accounts.
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 settle mean on credit report? ›
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.
Does it hurt your credit if you settle? ›
Debt settlement can eliminate outstanding obligations, but it can negatively impact your credit score. Stronger credit scores may be more significantly impacted by a debt settlement. The best type of debt to settle is a single large obligation that is one to three years past due.
What does it mean when a debt is satisfied? ›
A Certificate of Satisfaction is a legal document that confirms that you have paid off your debts in full, and it is issued by the courts or insolvency practitioners. In cases of bankruptcy or IVA, a Certificate of Satisfaction is issued when all your debts have been fully paid off or discharged.
