Am I doing this right?

[subzeroepsilon]

First off, I would like to extend a HUGE Thank You for this site and the information available on these forums. I have learned so much (including the acronyms) from just reading the posts on this board. I beg your forgiveness up front for the length of this post, but I wanted to provide as much insight into my situation as possible.

I recently relocated to a new state (WA) after spending the entirety of my adult life in California. I know my credit report is a mess and I made a promise to myself that upon arrival here I would do things right, leave my issues of the past where they belong and start fresh. I also want to get my past accounts in order so I can be in a position to buy a house in the next 3-5 years.

I spent most of my 20s being completely reckless with my credit history by not paying cards when times got tough (and they did). Currently my score is in the 475-525 range, with a goal to get to 650-700 by the end of 2014.

Current snapshot of my credit report (not including student loans):
EQ: 0 open | 8 CO | 2 CA | 1 auto loan (paid off, several 30-60 lates, 2 90 lates)
TU: 0 open | 6 CO | 7 CA | 1 auto loan (paid off, several 30-60 lates, 2 90 lates)
EX: 0 open | 6 CO | 6 CA | 1 auto loan (paid off, several 30-60 lates, 2 90 lates)

What I have done since I decided to change things:
1 - Paid off car loan [santander Consumer USA] in April (paid $1000 to settle $1250 remaining balance, reports as PIF-closed).
2 - Applied for $300 US Bank LANPass secured Visa (since I travel a lot for my new job and the airline I fly is affiliated)

Other things to note:
Most COs are from late 2008/early 2009 when I had some especially trying financial times. 2 COs are from early this year when I was unemployed (one for $438, other for $491).

So I'm not really sure the best way to proceed. I figured I need to get something positive and current to report (hence, the secured card), but how should I go about handling the past collections since they are beyond the SOL (4 years for WA, 3 years for CA) and I know that paying off old debts can counterintuitively reduce your score.

My question to you all is this:
- As my next step, I was considering getting a second secured card (Bank of America, Wells Fargo or DCU - based on what I have read here), or would it be better to add additional funds to the existing card?
- Pay off the two recent COs: better to settle or pay-in-full?

Thanks again for any assistance you can provide. I know the road ahead is going to be rough and might seem like I'm just idling in neutral but I hope the rewards will speak for themselves in time.

[Jnavarro]

USAA has some nice secured cards which should be open to non-mil, and if you can get into Navy Fed they are pretty good as well.

[cv91915]

Don't pay the COs, it won't help your scores or advance your goals unless you are persuasive/successful with PFDs. There is a lot of good advice here on how to attack those COs. Keep reading and good luck.

[mendelssohn]

USAA has some nice secured cards which should be open to non-mil, and if you can get into Navy Fed they are pretty good as well.

The USAA secured cards are not available to people that are not full members. I tried to open one last year.

 

I would first check what the SOL is in your state, and use the 1-2 punch (http://creditboards.com/forums/index.php?showtopic=428895) to attack the CAs that are past SOL.

 

If you can get in to DCU, not only will you be able to app for the secured card, but you will get a free EQ FICO score every month to help track your progress. All of the secured cards you listed graduate, but I believe that only DCU does not report as secured. FYI, you need a 580 EQ FICO for DCU membership, and they will do a hard pull for both membership and a secured card app.

Edited May 25, 2013 by mendelssohn