Credit Rebuilding Guidance

[Anonymous]

Any and all help you can provide would be greatly appreciated. As of now my Fico 8 scores are EQ 545, TU 542, EX 538 and I have just under $11K in total debt. 

There are currently 4 accounts in collection for a total of $1200, I have written letters to pay off the debt for 25% of the current collection. 

Almost $6k of my total debt is in a student loan. I just hit my 5th year as a teacher which allows me to apply for loan forgiveness, I have had 2 colleagues do this and both had their debt forgiven in less than 4 months. Fingers crossed on that one. 

Lastly and where I need the most counseling is how to pay down my two credit cards. The first is a CapOne Premium opened in 09/12 currently with a balance of $1665, limit of $1800 and an interest rate of 22.9%.  The second card is my Credit Union card opened in 07/06 currently with a balance of $1485, limit of $3500 and an interest rate of 8.9%.

I am looking to devote $300-400 per month in repayments and wondered how much I should contribute to each card. Also would you suggest alleviating some of the debt on the higher interest card with the lower one?

Ideally I would like to have at least one more report to help build my credit but I am not sure I am currently ready to do that. I don't want another credit card with a low limit that I will more than likely not use long term. I guess my only other option would be a secured loan through my CU.

Again I thank everyone for the help, at this point I don't really have a credit score goal, my goal is to be as close to debt free as possible by the end of the calendar year.

[Anonymous]

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@Anonymous wrote:

Any and all help you can provide would be greatly appreciated. As of now my Fico 8 scores are EQ 545, TU 542, EX 538 and I have just under $11K in total debt. 

There are currently 4 accounts in collection for a total of $1200, I have written letters to pay off the debt for 25% of the current collection. 

Almost $6k of my total debt is in a student loan. I just hit my 5th year as a teacher which allows me to apply for loan forgiveness, I have had 2 colleagues do this and both had their debt forgiven in less than 4 months. Fingers crossed on that one. 

Lastly and where I need the most counseling is how to pay down my two credit cards. The first is a CapOne Premium opened in 09/12 currently with a balance of $1665, limit of $1800 and an interest rate of 22.9%.  The second card is my Credit Union card opened in 07/06 currently with a balance of $1485, limit of $3500 and an interest rate of 8.9%.

I am looking to devote $300-400 per month in repayments and wondered how much I should contribute to each card. Also would you suggest alleviating some of the debt on the higher interest card with the lower one?

Ideally I would like to have at least one more report to help build my credit but I am not sure I am currently ready to do that. I don't want another credit card with a low limit that I will more than likely not use long term. I guess my only other option would be a secured loan through my CU.

Again I thank everyone for the help, at this point I don't really have a credit score goal, my goal is to be as close to debt free as possible by the end of the calendar year.

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Put all of your extra payments towards the Cap One card as its using more of its limit and its a higher interest rate. When its get to about $1K, thats when I would balance transfer it to your other card.

Apply for a second Cap One card after you get the balance tranferred. I'd suggest the QS1 rewards card. Sure, it will be a low limit initially, but if you use it a decent amount and make good sized payments, it will grow quickly. My wifes scores are similar to yours, she got her second Cap One card (QS1) with a starting limit of $500, and got it increased to $1500 by the third statement. Credit Steps should raise that to $2K in another 2 months. A secured loan is not really going to help much, scorewise. It will help a little, but not as much as getting that third revolving account. Thats not saying don't do it, just that you really should do both for maximum score boost.