New Delhi, Sept. 18 -- If a borrower takes a loan and fails to repay the full amount, the lender may agree to close the loan once the settlement amount is paid. However, the way the account is reported to credit bureaus can continue to affect the borrower's ability to access credit in the future.

A "settled" status indicates that the lender accepted an amount lower than the original dues. This can make the borrower less favourable in the eyes of future lenders. Knowing the steps to take after a settlement can help improve your credit profile before applying for new credit card or another loan.

A loan is generally marked "settled" when the borrower and lender agree on an amount lower than the total outstanding dues and that agreed amount...