I’ve been through a pretty significant financial situation over the last few years. Racked up credit card debt while I was making good money, lost my job, was left with payments I couldn’t make, and have spent the last 3 years trying to find a good job and get myself out of this hole. I’ve finally landed a good job, and my main order of business is to get my credit straightened out, because it’s pretty bad right now. I have a few credit cards that are maxed out (I’m utilizing about 110% of my revolving credit), and I have another 3 that I defaulted on that have gone to collections agencies (I’ve since set up payment plans to straighten those out).
With my tax refund this year, and some other funds that I’ve pulled together, I plan to take about $6k and pay off some of my debt so I can put myself back on the right track. My question: would it be better for my credit if I pay down my active and open credit cards so that I’m not utilizing such a high percentage of my revolving balances, or would it be better for my credit if I paid off the accounts that have gone to collection agencies?
I appreciate the help in advance.