Welcome @jeepin22 to the myFICO forums!
First off, TU 641 and EQ 635? Sounds like Credit Karma and Advantage Scores. For the most part worthless if they are Advantage Scores. You can go to creditchecktotal.com and sign up for a week trial for $1 and get your three FICO 8 scores and look at your credit files. Just be sure to cancel the trial before billing. You can sign up for the $1 trial as many times as you want to keep track of your FICO scores. A lot cheaper than a monthly subscription.
Secondly, you need a budget. A budget is your master plan on how to get where you want to go financially. If you need help with budgeting, google YNAB. Several MFers have suggested YNAB to help get a handle on a budget. I looked at the site and looks legit. I have been budgeting for years so it is a little basic for me but I like how they explain budgeting and how the site is set up. There is a monthly fee after the free trial so you will have to decide.
Third point, you need to start building emergency funds. I know it is difficult but your goal is to have a minimum of three months savings to be able to pay your fixed recurring bills like rent, car payment, utilities, transportation, food, and minimum CC balance payments. Also, you can use this fund for unexpected emergencies like auto repairs and the like. I like to say that relying on CCs for unexpected financial emergencies for cash is like relying on a handgun for an unexpected need for cash. Both are tools that can dangerous if you use them incorrectly. Rely on your emergency fund and not CCs for the unexpected.
Next, Credit One. It is a sub-prime card and has a purpose. My take on it is that it has served its purpose and you should close the account and save the high-interest rate and AFs associated with it. Your Credit One will stay on your credit file for up to 10 years after you close the account and count towards you Average Age of Accounts (AAoA) for that period.
You stated "Yes I understand one of them is only $285, but it also has been added and removed from my report numerous times" This sounds like you have disputed the account and it was removed because the creditor could not verify the account within 30 days and then the creditor got around to verifying the account and it was updated and placed back on your credit report (CR). If this is the case, STOP! Never dispute accurate and correctly reporting negative information on your CR. This allows the original creditor (OC) or collection agency (CA) the chance to update you CR which in turn can cause your FICO scores to drop due to the fact that older negative information tends to lessen its impact on FICO scores over time. When an OC or CA updates or confirms a negative account (not re-age an account which is illegal) that impacts your FICO scores as fresh derogatory.
I suggest you work on building your emergency fund and when you get a month of funds built up you then worry about using half of that money to start to pay off your remaining outstanding debts. Again build up your emergency fund to a month worth or more and only use half of it to pay off your charge-off or collections debt. If the OC or CA will not PFD then PIF and start a goodwill (GW) letter writing campaign to have your CR adjusted to remove the derogatory information. You do not want to settle a debt for less than owed because that does not create much goodwill feelings from the OC or CA. The CA can remove their derogatory collection account but not the OCs derogatory. Only the OC can do this.
Ultimately, what a person needs to improve their FICO scores and build credit are three open credit cards (secured or unsecured) in good standing and one open installment loan in good standing such as a car, home, student, personal, share secured, or credit building loan. This combination is what the myFICO score theorists here have determined is what you need for optimal credit building and FICO score. You can have more CCs and more installment loans, however, this will not increase your FICO scores.
Next, (this is only important if you are attempting to purchase a large ticket item like a home or car) is paying in full all of the credit card balances each month, before the posting date, except one. This is called the All Zero Except One (AZEO) method. The one credit card you allow to post a balance needs to be less than 8.9% of the credit limit of the card. So using one card each month to buy lunch, letting it report and then paying in full will maximize FICO scoring. Keeping your utilization of your cards below 28.9% both individually and collectively will prevent you from incurring a FICO scoring penalty.
An installment loan will have its greatest impact on your FICO score when the amount owed is at 8.9% or less of the original amount owed which is usually in the final months before the loan is paid in full. If you don't have an installment loan you can check into SelfLender or a Share Secured Loan at a Credit Union.
Your CU sounds like they are jealous and only wants to help you with a consolidation loan by making you cancel your cards and going with their card. I am sure their goal is to keep you from going back into debt once they have paid your balances. That is a choice you will have to make. I personally would keep working to pay down the debt.
Keep in mind, building credit is a marathon, not a sprint. It involves demonstrating to a potential creditor that a person can handle credit responsibly. If you have open, active accounts that are being paid on time and pay all of your bills on time all the time, apply for credit only when you actually need it and use credit cards sparingly maintaining low credit utilization, then you’re going to earn and maintain great credit scores. It would be impossible for you not to do so. This is the fastest way to build good, solid credit.
I hope this is specific enough for you and perhaps other MFers will chime in with additional advice or correct any misgivings that I have offered you.
Good luck and best wishes.
