When your account is only a little past due, collection efforts are mild. For example, you may get a friendly phone call or past-due letter reminding you to make payment. As your account gets further behind, the letters and phone calls get more serious and the status of your account or loan may change. The impact on your credit score also becomes more significant as your past-due time increases. If you have an account that’s currently past due, there are a few options for dealing with it. Beware that even though you’re making catch-up payments, your account may not be considered “current” until you’ve fully paid the past-due balance. If you don’t catch up before you become 180 days past due, your account will likely be charged off. At that point, your account will be closed and the entire balance will be due in full. You can consolidate using a balance transfer to move the balance to another credit card. Be aware that it can take a few weeks for a balance transfer to complete. Make the balance transfer request as soon as you decide this is the best way to handle your past-due account, so you can ensure the transfer is complete before your account is charged off. However, be aware that most, if not all, credit card companies will charge a fee, ranging from about 3% to 5%, on the amount transferred. When you present the settlement offer to the creditor, you need to have (or be able to borrow) enough money to settle the account. After you have fully settled your account, the “Settled” status will appear on your credit report.
