- 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.
- 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.
- 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.
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.