My advice would be to use the money to get everything current. Put the money aside and pay monthly for a few months, maybe pay double payments. What lenders tend to look for is on time payments. It may actually do you more harm than good to pay it all off at once. Seriously, I would get everything current, then make monthly payments for at least 6 months prior to writing the big checks to pay everything off. It helps, i know!

If you do it right, several months.

If you do it wrong, several years.

If the creditor has already posted negative information to your credit report, it has to be removed. Just placing “Paid” on your report will not erase the negative information about late payments.

Once the creditor has your money, it’s very unlikely he will help you to restore your credit. Therefore, get an agreement IN WRITING from the creditor to remove any negative information before you pay them a dime!

This nonsense people spread about a paid deliquent account looks better then an unpaid one is wrong. Bad is bad, and it does effect your credit score!

Well, to be honest with you your best bet would be to put the money in the bank that you plan on paying the credit cards off with. Each month you can pay over the monthly limit, but make sure you make your payments on time. By just paying off your debt it’s not going to really help your credit score. They want to see someone who has really established themselves and has a good reputation. You might be able to get a loan anyway, but I will advise it might not be the best nor the cheapest interest rate. These are definite things to keep in mind.
If you do these things it will help your credit score, and you will be building a good reputation for your credit. This will also cause your credit score to go up. Once you have established good credit again, you will be able to get the loan you want and deserve. Hey we all fall into some bad times. So you aren’t a bad person!! Just get back up on your feet, and move on. Life throws us curves and sometimes we have to duck, sometimes we have to tread through!
My suggestion to you would be to go to the websites I have pasted below. It explains what is a credit score, how do I get my credit score up.
Good Luck, I hope this helps!

Being 5 months behind looks really bad on your credit, however, your credit score will start improving as soon as you start paying all of your bills on time. I don’t think paying off your old debt will make your score go up much at all, if anything… just make sure that you’re keeping your bills current, on time payments each month is what will increase your credit score. Good Luck

This could take years to resolve however once you pay them off seek other credit options like receiving a new card which will be at a higher interest rate but you’ll never have to worry about the rate if you pay it off on time each month. This alone after a few month will improve your rating. But your still looking at years of faithful payments to find a decent home loan. Check your FICA score yearly. You need to be at +650 for a good mortgage rate.

Paying off all your debt may raise your score a little, but the thing that has the most impact on your score is on time payments on installment loans such as a mortgage or auto loan. If you pay everything off, and don’t have any open loans or lines of credit, your score will not go up or down until there are open accounts reporting to your credit.

Could take as much as 7 years to have it removed for your credit report.

I am guessing around a year and a half to two years.

Credit score to improve could take a few months, mine was pretty high then i bought a new car and it dropped about 50 points this was 11 months ago and my credit score still isn’t at what it was before.

It depends on the state, it’s usually 3-7 years for you to have a clean credit score. Good luck.