Will settling/repaying old loans improve my Credit Score

I have a few loans running and on one of them I am being reported as a defaulter. Will settling this loan help me improve my score? Will it be a significant improvement? Should I settle or just ignore, because my track record in other loans is just perfect.

On this loan, there is a dispute and I am not very keen to pay the bank

  • Abhinav

    Without doubt.

    Your score will see a lift when you settle loans that have so far been reported as defaults. This is one of the key parameters used by credit bureaus for getting your credit scores.

    On the other hand, what you mention as a good repayment history on "other" loans may be used for a subjective  or a case-by-case evaluation by a bank/NBFC when giving out a loan. But you need to first cross their credit score filter process.

  • Rohit

    Ideally it should. But please expect a small shift and a significant time lapse before any substantial improvement can happen in your score. Not sure why, just something based on a few hear say cases