New Delhi, Feb. 21 -- Your credit score is an important factor in determining your loan eligibility and the interest rate for your loan repayment. A healthy credit score improves your loan approval chances at your desired terms. An important factor that can cause an extreme change on your credit score is a "settled" status on your loan. Let us take a closer look at this term "settled" and understand how it may affect your credit score.

A loan is said to be "settled" when it has been partially paid off, usually as a result of an agreement between the borrower and the lender. In such cases, the borrower may have been unable to repay the full amount. Usually, this is a formal agreement between the borrower and the lender on a specific loan ...