Ans:
A loan settlement on a loan can harm your credit score for up to seven years. It is because the settled debt will show up on your credit report as ‘settled’, not paid in full. It will damage your credit score by 100 to 125 points. Lenders will view your credit history when deciding whether or not to lend you money. However, a loan settlement amount is a viable option if you are 90 days behind on your payments.