I’ve done some reading to try and get a grasp on what to do, but I think I’m more confused now then when I started.
Back in 2008-2009 I went through a rough time (while in college) making ends meet, unfortunately, I had to default on some things and here I sit now. At the time, I had a Capital One credit card which I used responsibly for about 6 months before I was forced to live off of the $ 750 credit limit. Unfortunately, the bill went unpaid for a few months, and when I went back to pay it off, it had already been closed and sent to collections. I also switched cell phone carriers, canceled my Verizon contract (apparently not successfully) and also (tried) to cancel my Gold’s Gym membership. All 3 of these accounts ended up in collections.
Rough Estimates of items in collections (all from 08-09):
A) Capital One = ~1200
B) Verizon = ~650
C) Golds Gym = 88
In 2013 I wanted to begin to rebuild my credit, and I applied for 2 cards. I was denied for a Capital One, but approved for a Barclay Card ($ 500 CL). I have kept my utilization low (typically ~15% or less) and have made full statement balance payments or more. I have never gone near my limit, never been late on a payment, never paid just the minimum. I called Barclay last week (I’ve had the card for almost 1.5 years) and requested a CL increase. I was denied because my TU score is 574. The CSR told me that paying off the collections accounts I have would help boost my score, and they can’t approve me for an increase until it is over 600 (regardless of my very responsible use of the card).
Where do I go from here?
I have the money to pay off all 3 debts in collections immediately and be in absolutely no financial distress. However, I’ve been reading that it’s a better idea just to wait for the debts to fall off. If I pay them in full, will it make a difference? Will it renew the amount of time they report on my credit? What else can I do to help rebuild my credit?
***BTW, my gf has a 10k CL Amex that she is willing to add me to the account if that will help report well on my credit. Would that help or make no difference at all?***