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Credit Consolidation vs. Debt Settlement: What is the best option for you?

Finding the right debt relief option can be tricky. Given that using the wrong debt solution can lead to even greater financial distress, it’s important to familiarize with these concepts so you can make an informed decision.

What is Debt Consolidation?

This financial process rolls multiple debts into a single, consolidated monthly payment.  The goal being to reduce the interest rate, which allows you to get out of debt faster, even though you pay less each month.

However, debt consolidation is not a one-stop fix for all of your financial worries.  

When is it NOT A Good Option?

  • If you have bad money habits or issues maintaining a healthy budget, debt consolidation will only delay your financial problems.
  • If you have out-of-control credit card bills, it may be appealing to roll those debts into your mortgage and deal with that new fixed payment every month. Just remember – if you fail to pay your credit cards it could go to collections or you could be sued. If you default on your new combined mortgage payment then you could lose your house.
  • When you consolidate your debts, old accounts are closed and replaced by one new account. If you are concerned about your credit score then this might not be in your best interest.  

What is Debt Settlement?

Is a process where you pay back a portion of what you owe in exchange for a full discharge of the remaining balance. Simply put, you settle your debt for a percentage of what you owe. The settlement is usually made in a single lump-sum payment.

What are the Advantages of Debt Settlement

  • Settling your loans can mean paying a lower overall interest rate on your debt which will save you money.
  • Unlike a debt consolidation or credit counseling plan, debt settlement can help you pay a much lower amount than what you originally owed. 
  • Debt Settlement allows you to pay off what you can without having to destroy your credit like a bankruptcy can. 
  • Debt Settlement also offers a greater level of privacy, putting you the consumer more in control of the process and a lower overall cost than other debt relief options.

If Debt Settlement is the best option for you, contact 

THD Credit Consulting.

We help settle credit card debt, home equity lines of credit, collection accounts and charged off accounts. In most cases we can save you up to 75-80% on the amount that was owed and stop all the harassing phone calls.  

Give us a call (800) 822-7120 or email us today at

Why are your FICO® Scores different for the 3 credit bureaus?

In simple terms, A FICO score is a three-digit number that lenders and credit card issuers use to predict how likely you are to repay them if they grant you credit. The company uses a proprietary formula and has various scoring models.

Because the data that goes into the model could come from three different national credit bureaus (Equifax, Experian and TransUnion) it creates the likely possibility of having three different scores.

Here are some points to consider when comparing scores across bureaus:

  • Not all credit scores are “FICO” scores. So, make sure the credit scores you are comparing are actual FICO Scores.
  • Access all 3 FICO scores at the same time. A differentiation in time could result in score differences due to time based components in the scoring model.
  • Not all information is supplied to all three credit bureaus. It’s up to lenders to decide which information they report to the major credit agencies – and which agencies they report to in the first place.
  • There is a possibility that you have credit under different names which may cause incomplete files at the credit reporting agencies. Typically, the credit bureaus combine all files accurately under the same person, however there are many instances where incomplete files or inaccurate data (social security numbers, addresses, etc.) cause one person’s credit information to appear on someone else’s credit report.
  • Lenders report credit information to the credit bureaus at different times, resulting in one agency having more accurate information than another.
  • The credit bureaus may record, display or store the same information in different ways.

If you want to track your score over time, you’ll want to use the same brand of score and the same version of it as well. That controls for differences due to which bureau’s credit report is used and which formula interpreted it.

If you have questions about your credit score, reply to this email or give me a call at (800) 822-7120.

-Erik Kaplan

When Should I Ask for a Credit Limit Increase?

It is not always in your best interest to request a higher credit limit, or credit line increase, mostly because there are consequences. A credit line increase request can trigger a hard inquiry on your credit report, which can have a negative impact on your credit score by a few points.

On the other hand, there are situations where it can be quite helpful to request an increase. 

Here are guidelines:

  • Your credit score is strong: If you have a higher credit score than when you first got the line of credit and you’ve been repaying it on time each month, it is a good time to ask for a credit limit increase.
  • You have good repayment history with the issuer: When you have shown the ability to repay debt and payments are on time you are demonstrating responsible behavior with the card issuer.
  • When your income increases: Showing an increase in income can help get approved when requesting a credit limit increase. 

The best reason to increase your credit limit on your credit card is so you can maintain a low credit utilization rate, which can help increase your credit score. If you can be purposeful with the increase, another good reason is to have a higher credit limit for unexpected expenses such as an emergency.

If you have questions about when to increase your credit line or how to improve your credit score then reach out to our team of experts at

-Erik Kaplan



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