This is as the name suggest, a settlement where you will be offered time to pay the outstanding and after this is paid in full and within the time specified in the settlement letter, the entry against your debt in your credit file will show “NIL” and any adverse entry like “Written off” will be replaced and in most cases this will improve your credit score.

The advantage of this type of settlement it’s offers time to repay the settlement amount and does not impact on your credit score.

The disadvantage is, if you miss any of the EMI, then the full amount plus interest and charges would be payable and any future offer of a settlement will be lower and without the credit clearance option.