Hi Terry, Do to illness, I behind on several credit cards and receiving phone calls for payment. However in a few months, I am to receive an inheritance which will be enough money to pay these off. Per your statement regarding collections calls, is paying directly to the Credit Card Company will help my credit score? Or should I make arrangements to pay on a monthly basis, which would provide a history? Thank you.

Terry Says:

That depends on whether the card company has “written off” the balance and sent this to a collection agency.  The caller must let you know WHO is calling you (and abide by certain rules).  I would try to stall them if it is a collection agency, until you are in a position to make a deal.  Do NOT tell them you are coming into money.  But do ask “what it would take” to make this go away — ie how much they would “settle for” if you could borrow some money to pay off the balance.  Don’t agree initially (especially since you don’t currently have the money)!   You can make the same offer to the original card issuer.

First, though, go online to www.AnnualCreditReport.com to get  your credit report from two different bureaus (and don’t sign up for credit monitoring).  That will tell you a lot about the status of your accounts.  The bad stuff is going to stay there for seven years, so don’t think that making payments will help.  Your real challenge is managing these balances.  If the card issuer will write off the accumulated interest, and let you keep the card, you may be able to make that deal by paying only the amount your originally charged.   Again, it depends on who “owns” the debt now, so finding out is the first step.