What is the Meaning of “Closed”, “Settled” and “Written Off” in Your Credit Report?

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A healthy CIBIL report and score increases one’s chances of getting a loan. Research data based on CIBIL (Credit Information Bureau (India) Limited) data analysis indicates that 79% of loans and credit cards were approved for individuals who had a credit score of 750 and above.

The first step towards developing a healthy CIBIL report is to understand its contents. One of the most important elements of the credit report is the “Accounts” section. This section contains the details of all the loans and credit cards you have availed including name of lenders, type of credit facilities (home, auto, personal, overdraft, etc.), account numbers, ownership details, date opened, date of last payment, loan amount, current balance and a month on month record of your payments.

Understanding the Key Aspects of your Credit Report

The first step towards developing a healthy credit report is to fully understand its contents. One amongst the foremost necessary components of the credit report is the “Accounts” section. This section contains the main points of all the loans and credit cards you’ve taken. 

It lists various details of your credit like name of lenders, form of credit facilities (home, auto, personal, term loan, overdraft, etc.), account numbers, possession details, date opened, and date of last payment, loan quantity, current balance and a month on month record of your payments. This section additionally provides “Status” on the account that defines the “health” of the account. 


If you discover a date adjacent to the ‘Closed’ field in your account section, this implies that that loan account has been closed by the creditor. In other words, it means that you have paid off your loan fully and therefore the bank has marked this account as “Closed” in your credit report.

After closing a loan it’s necessary to get a No Dues Certificate (NDC) from the creditor. Banks issue a No Due Certificate (NDC) or Closure Letter. The NOC states that the loan stands closed and the borrower has repaid the loan dues completely. So it is reported as “closed” on your credit report.

Written Off

When you are not able to make payments against the outstanding loan/credit card amount for more than 180 days, the lender is required to “write-off” the amount in question. The lender then proceeds to report this on your CIBIL Report as “Written off”. This is a detrimental status for the approval of your loan or credit card applications as the lender may not want to provide a loan or credit card to someone who has not paid dues on past loans or credit cards.

If the CIBIL Report shows a “settled” or “written off” status, then it may get difficult for the individual to obtain a loan. Understanding the elements of your credit history and then working on them to build a good CIBIL report and score will help make you “Finance ready”.


If you’ve partially paid the dues and settled a credit card or a loan then the corresponding loan account is marked as “Settled” on the credit report. Once you settle an account, it means the credit establishment is agreeing to simply accept a payoff quantity than the sum originally owed. As a result of the financial organization taking a loss, a standing of “settled” is perceived as negative and damaging to the borrower. 

It is necessary to grasp that although there will be no impact of the “settlement” flag on your credit Score, your credit history can show a “Settled” standing in your credit report and there’ll be Days-Past-Due reflective on the report since the payment on the loan has not been timely. 

Every bank has its own policy of viewing a “Settled” standing. This can impact your future loan applications consequently. If you are thinking of settling an account that is in good standing, get in touch with your lender first to see if there are other options that will allow you to continue repaying the debt without damaging your credit history.

Generally, a settled account will remain on a credit report for seven years from the date of settlement with the lender. Even if you have resolved the debt years ago, it will remain on your credit report until the seven-year period is covered.

CIBIL report subscription is priced between Rs 550 to Rs 1200 for individuals depending on the number of reports delivered. For institutions, CIBIL charges flat Rs 3000 each time a company requests for the report and score.

How to Settle the Dues as Agreed and Clean your CIBIL Record?

You must have agreed on the sum to be paid to the lender over a specific period of time while signing the settlement deal. Most likely, the agreed amount would be far lower than the original outstanding dues. However, you must ensure discipline in your spending routine to save enough to repay the settled debt on time. The general advice would be to cut down the monthly spends by a few percentages till the time the debt is paid off, if not forever. As soon as you repay the whole agreed amount, the lender will report the same to CIBIL as settled, marking a much-needed change in the credit status from written off.

How to Dispute Errors on CIBIL?

You can dispute such errors on the website of CIBIL. These would involve the following steps –

  1. Go to ‘Dispute Resolution’
  2. Click on ‘Raise an Online Dispute’
  3. Login to CIBIL
  4. Go to ‘Credit Reports’
  5. Navigate to ‘Dispute Centre’ before clicking on ‘Dispute an Item’
  6. Fill the online dispute form
  7. Keep the control number with you
  8. Choose the relevant section you want to dispute
  9. Select ‘Dispute Type’ if you are disputing ownership or duplicate
  10. Enter a value for the disputed field if you are disputing data inaccuracies
  11. Click on ‘Submit’ in the end
  12. Your dispute appeal gets processed

How does Loan Settlement impact your Credit Score?

Whenever a lender decides to write off a loan, he immediately informs the case to CIBIL and other rating agencies. Though the loan transaction comes to an end in the form of settlement, it is still not a usual closure. Therefore, credit rating agencies term the transaction as ‘settled’ making other lenders view it as a negative credit behaviour.

In turn, the borrower’s credit score drops. In addition, these agencies hold on to this information for about seven years. If the borrower wishes to take another loan during this period, lenders may get wary of the repayment capability of the borrower. There are possibilities for lenders to reject the loan application as well.

When you are dealing with credit, it is essential to know certain basic terminologies. Terms such as ‘closed’, ‘settled’ and ‘written off’ are common words used on a credit report. If the credit report shows a “settled” or “written off” standing, then it’s going to get tough for the individual to get a loan. Understanding the key details on your credit report and history, can help you better figure out how to best improve it.