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 circumstances 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 circumstances 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