One Time Settlement Scheme , OTS effect on Credit History of an Individual future credit history : Just as all information about credit availed (amount availed, payments, defaults etc) is reported to Credit Information Companies (CICs), the fact that the borrower has closed a loan account after accepting an OTS is also reported to CICs.
The bank is required to explain to the borrower the consequences of accepting an OTS on his / her credit history/ credit rating in the records of the CIC.
As lenders check a potential borrower’s credit history / score, defaults in payment or accepting an OTS may affect his chances of getting credit in future.
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