With your scores and DTI where they are now, I'd say give up on that streamlining loan. Not gonna happen.
Getting your card balances down below 30% on both (that is, less than $90 on each card) will improve your FICO utilization points a great deal. Ideal credit mix for FICO scoring requires three revolving tradelines and at least one installment line (your car and furniture payments are your installment lines, so you're covered there) - but I wouldn't necessarily pursue that third revolver just yet, since both of the ones you have already are secured. I'd wait until my score improved a little and I could get an unsecured one from Capital One or another major lender (not a bottom-feeder like Credit One or First Premier), or maybe get a Walmart card or other useful store card as my third line.
Your budget is already tight. Squeezing $100 out of it on a monthly basis may seem like a monumental task - but if you can do this, you can pay down your credit cards and then hopefully build yourself a reserve account of several hundred dollars, within a year's time. That reserve account can replace your payday loan approval as your "backup" - and if you have to use it, make yourself pay it back. There just won't be any interest or fees to pay yourself this way. Building your own reserve in this way can also help you get in the habit of saving up for that future mortgage down payment, too. Finding that $100 extra each month to pay into the credit cards (without replacing the charges!) may be a combination of eliminating fast-food/restaurant meals (make sandwiches), eliminating movie night (switch to redbox or use Netflix), reducing your cable package if you have one, clipping coupons, selling old books/movies, babysitting, whatever... you need 4 months at $100 a month to get yourself under the 30% mark on both cards. 6 more months after that and you can have a savings reserve over $500, and enough besides to treat the two of you to a mani/pedi and a nice dinner 
Your car insurance bill is something to think about as well - if you are able to pay off your vehicle and switch to "liability only" coverage, what will happen if an uninsured motorist hits your car, or it gets stolen, or a large storm causes a flood that destroys your car? If you can survive one of these things on your own, then by all means stop paying for full insurance coverage. But if you cannot, then you might need to consider what kind of insurance you really need and what that realistically costs, versus eliminating coverage just to lower the bill. I know that as a working mom, your car is important to daily life.
Old collections are going to hurt you until they age past 7 years and fall off the reports. You have a long way to go financially before you have the cash on hand to just pay them or try to pay-for-delete, so you need to figure out if that is going to be feasible before these bills get past 7 years old. You've got about a year and a half left on the car note and the furniture loan (based on the figures you gave on those), and once that's passed, you'll have about $470 a month to apply toward other things - like old debts and increasing savings, while keeping cards current.
Your payment history needs you to be on top of things, scheduling-wise. Your payment history is a large part of FICO, and if you get too behind (more htan 30 days) on any one account, you are going to kill off any progress you make in your score. Even being a few days late, while it won't appear on your credit report, can cause you to incur all kinds of fees and late charges from various lenders, and can even increase the interest rate on your credit cards. So this is a must - mark a calendar, set an alarm do whatever you need to do to pay everything on time. Even if it's just minimum payments - you can always send in another extra payment later in the month if you're still working on cutting down credit card balances.
Nothing is ever hopeless. Sometimes not easy, but never hopeless.
