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The Danger of Settled Accounts on Your CIBIL Report
Avoid loan settlements—always pay in full so that your account is marked ‘Closed’, not ‘Settled’, in CIBIL.
When a borrower ‘settles’ a loan instead of paying it in full, it’s marked as ‘Settled’ in the CIBIL report-not ‘Closed’.
This indicates the borrower failed to honor the original terms. Such remarks can reduce your score by 75-100 points and stay visible for seven years.
Always repay the full principal amount and ensure the lender reports the account as ‘Closed with zero dues’.