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.