Bob Was Injured And Is Now Behind On His Credit Cards

“Dear Steve,

I’ve been out of work since 10/17/07 (Auto accident) & was let go from my job…I am trying to work with credit card companies. One said they would deffer payments for two months but close the account…How does this effect my credit score with the credit bureau?

Does deffered credit card payments (by the CC company) effect your credit score and would doing this with more companies be detrimental?


Dear Bob,

Yes, any agreement with the credit card company will be an internal agreement and will most likely be reported on your credit report as a behind or delinquent payment. The reasons this can happen are really process driven by automated reporting and secondly it is the interest of all that are looking at your report to flag that you are having a problem.

The closed account will definitely be reported to the credit bureaus, will negatively impact your credit score and will appear on your credit report. It will probably show up as closed by the creditor.

Bob, I don’t really think that the issue of protecting your credit report is as important right now as resolving your underlying financial issues. Being out of work is not conducive to being able to repay the debt even with a deferred arrangement.

Surviving your income shortage is going to be the primary issue and you can rebuild your credit latter. If you have some income coming in and can afford to make payments, make arrangements with the creditor directly or through a debt management company.

If you are using saved money to make payments and you are spending down what money you have just to limp along, then I think we need to look at more drastic solutions. Spending down your savings and assets to pay bills is never a good long-term solution without income to replace it coming in now or in the very near future.

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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