I just got a small settlement check ($3500) and I am trying to decide what would make the biggest impact on my credit. I have enough to pay off one small account ($1500) and a good portion of a 2nd ($2000 towards a $5500 balance). Both of these accounts are in good standing. OR, I have several charged off accounts. Should I be using my money to try to get a settlement? One of the charge-offs is with Capital One. The balance is around $3500. It is about 2 years old. If this is a better choice, what would be a reasonable offer? I do know about requesting a confirmation in writing along with favorable reporting. Thanks!!
Pay the charge-offs. It will stop them from reporting a delinquent balance each and every month. This will help your utilization far more than paying down the balances on your current cards insofar as the charge-offs look as if their at 100%. 35% to 50% is reasonable in terms of an initial offer. You should also be able to remove the Capital One tradeline completely after its paid. Give it about six months.
