Advice - pay off medical debt or credit cards

[caminaStyle]

Hi, 

I'm trying to get myself on track and raise my credit score. I likely need to lease a car in the next 12-24 months and would like to buy a home in the next 5 years.  Currently in my last year of a PhD so finances are tight, but I'm working to cut out more costs and currently paying about $1000 down in addition to all new charges each month.  I expect to at least double my salary after I graduate, so trying to do triage to get the debt down to a more manageable amount and my credit score in shape  until then, when I expect to pay it off pretty quickly.

CRA stats: Ex 641; Eq 659; TU 645

Total CU 67-68%

Credit cards: 

• Apple Card - $396 / $4000 CL; 9% CU; APR 22.74
• Discover - $12,302 / $15,000 CL; 82% CU; APR 15.49
• JPMCB CARD (Amazon) - $549 / $1,700 CL; 32% CU; APR 22.99
• Macy's - $0 / $600; 0% CU; APR 25.49
• Wells Fargo - $4,698 / $5,500; 85% CU; APR 13.1 ($2254 of this is on 0% APR BT until 4/23)

I've just paid off the Apple and Amazon, so those should come down to 0% CU, and the discover down $200 to about 80% CU. Total CU 63%

I also have 2 medical debts in collections:

• Ability Recovery - $2,007 (on record until 2/24)
• Ability Recovery - $1,401 (on record until 7/24)

Experian keeps sending me annoying things to get a debt consolidation loans but if I go to see the options they offer (without hard inquiry) they are all higher than my cc APR so I don't know if that makes any sense, though I guess maybe it would improve my score by lowering my CU? I have only recently heard of the rules changing on medical debt and so I am wondering if it makes sense to just work to pay those off first. Would that make the biggest impact since paid medical debts no longer show on credit? Am I understanding that correctly? If so, would I have any luck negotiating a lower amout to show as paid in full?

Thank you!! 

Edited: to add APR to card info

[FireMedic1]

Welcome to the forums @caminaStyle 

The biggest impact to a score is util %'s on cards. Paying down the revolving debt will do the most good score-wise. The ding for collections is the same when it hits and stays. Pay down the debts, scores will follow. Tackle to highest util % card first and then on down to the highest APR card. For Med Collections from our Mod @gdale6 

Medical collections are some of the easiest to get removed from your CRs, here are the steps that you should follow to address them:

1. Call the OC and see if insurance can be billed, (or-rebilled), collections ultimately paid by insurance get removed per new rules that came from CRAs settlement with 22 state AGs. If not then
2. see if you qualify for Charity Care, if not then
3. ask that they recall the collection in exchange for full payment
4. Send the reporting CA a PFD offer
5. Google the HIPAA Process and contact its creator for help, this process cannot be discussed in any forum of myFico.

[Gidgetmom]

Right now, I am all about finances before score...so that factors into my opinion.  IMO, I would be working on the 2 credit cards that are charging interest, where the collections are not.  Yes, the collections are a weight on your score, but so is the utlization on your cards.  The interest is a weight on your finances.

Once the cards are under control (paid off), you can decide if the collections are worth settling or allowing them to age off your report.

Congrats on the last year of your PhD!

[gdale6]

For Fico score moves I would pay off CC debt over the medicals. Medicals are not used in quite a few calculations when apping for credit. The medicals can be deleted at a later time if you can settle them as any medical debt now paid off is automatically deleted.