Full and final settlement letter
Credit scores & reportsA written offer to settle a debt for a reduced lump sum.
Overview
It sets out the amount you offer and the terms of settlement.
You should always get agreement in writing before paying.
Why it matters
- It can resolve a debt for less than the full balance.
- It provides clarity on settlement terms.
- It helps prevent disputes later.
FAQs
Does a full and final settlement affect my credit report?
It may show as partially settled, which can still affect your score.
Should I send the letter before paying?
Yes. Get written acceptance before making a payment.
Related terms
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