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 asktheexpert@thdcreditconsulting.com.

-Erik Kaplan

How Credit Cards Impact Your Credit Score

Staying on top of your credit card bills is a key part of building and maintaining strong credit.  Here are a few things you need to know:


Credit Utilization
You’ve probably heard at some point that you should keep your credit card utilization under 30 percent. 
What does this mean exactly? 
Credit Utilization is the total amount of credit you’re currently using divided by the total amount of credit you have available and is one of the most important factors in determining your credit score.
Managing your credit utilization rate can be a simple way to help improve and maintain your credit. Focus on both parts of the equation – your balance and your credit limit.


Payment History
Payment history is an important component of your credit score and one of the most damaging habits you can have is failing to pay your bills on time.
Understandably, life can get busy and it can be challenging to keep up with your payment due dates. So how can you make sure you don’t miss a payment?
  • Consider a mobile app to manage your credit card and bank accounts you’re your smart phone.  You can track and pay bills with Dudatez – Just set it up and the app goes to work for you.
  • Alternatively, set up text or email alerts to be notified when your payment due date is coming up.
  • If you have multiple credit cards, consider requesting the same payment date for all your accounts.
Consider The Credit Score Affect
Paying off money you owe is always a good idea, as is knowing what kind of debt your dealing with and prioritizing what will give you the biggest boost. Money you borrow for a home or student loan is considered ‘good debt’ because it can help boost your financial position.  
The ‘other’ debt is usually in the form of credit card debt or a personal bank loans. You should always tackle these debts first. It will lower your utilization ratio, having a positive impact on your credit score and make you more attractive financially.
Have questions about your debt or credit score?  Reach out to our team of experts at asktheexpert@thdcreditconsulting.com.
– Erik Kaplan

How to Build Credit in Your 20’s

 Your school years might be over, but there is one grade you still want to work hard for… your credit score.
If you are just starting to build credit, you may find yourself at one of two extremes: struggling to get past an almost non-existent credit history or using your credit card excessively thinking you will worry about it later. While opposite ends of the spectrum both can hinder your credit score.
Building a solid credit history is essential to qualifying for a mortgage, auto loan and credit scores may be used by landlords and even potential employers.  In addition, without credit it will be very hard to qualify for a decent credit card.
Here are 4 ways to build your credit:

1) Don’t spend too much

You landed your first job and might even have money deposited into your account twice a month…but go slow spending it.  You want to start building up a cash reserve, so figure out how much you can live on and save the rest. 

2) Pay your students loans but don’t worry about paying them off
Typically, student loans have low interest rates so paying them off quickly won’t save you a ton of money.  Stay current on your payments but focus on putting money aside for an emergency fund or retirement.

3) Think about the future (yes, retirement is a long ways away)

Saving even a little in your 20’s can make a big difference later on in life.  If your company has a 401k plan, make sure to participate. Try to place a minimum of 10% of your pre-tax salary into this account.

4) Create a healthy credit score

Do your homework and find a starter credit card account to start establishing a credit history. Spend a little each month and pay your balance in full. By making payments on-time you are proving yourself to lenders. 

The decisions you make in your 20’s about money could pave the way to a lifetime of financial health.
Have questions?  
Reach out to our team of experts at asktheexpert@thdcreditconsulting.com.

Equifax Data Breach: What can you do to protect yourself?

This data breach is among the worst ever because of the amount of people affected and the sensitive type of information exposed. With Social Security numbers, names, birth dates, addresses, driver’s licenses and credit card numbers exposed, up to 143 million Americans could be vulnerable to identity fraud.

Here is what you can do today:

  • Fraud Alert: Consider placing a fraud alert on your files for 1 year. This warns creditors that you may be an identity theft victim and they should verify that anyone seeking credit is actually you. You can do this by clicking here.
  • Credit Freeze: Also known as security freeze, this tool lets you restrict access to your credit report, which makes it more difficult for identity thieves to open new accounts in your name. Click here to do this now.
  • Monitor Your Credit: Keep an eye on Hard Credit Inquiries, New Accounts, and Uncharacteristic Transactions. CreditKarma.com offers free credit monitoring of your TransUnion credit report, which means you will receive notifications if something changes. The service is free to all members. *credit karma scores are not always accurate
  • Check Your Credit Reports: Every year, you can request a free copy of your report from each of the three major credit reporting agencies. This means that you can effectively check your credit free every four months or so. 

Have questions? 

Reach out to our team of experts at asktheexpert@thdcreditconsulting.com.

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Refinancing? Answering your FAQ’s.

In this installment of Ask the THD Experts we will answer some frequently asked questions about refinancing and credit scores.

What credit score is needed for refinancing?

One thing is for certain, your credit score will have a big impact on the refinance rate you will be offered. Lenders generally use credit score bands – which are algorithms that create numerical ranges used for lending decisions. 

 Here is an example of FICO Score ranges and what they mean:

800+:                   Exceptional

740-799:              Very Good

670-739:              Good

580-669:              Fair

579-Lower:         Poor

Why does our lender want us to close credit cards before the loan is granted?  

If the borrower has a high Debt to Income (DTI) Ratio, a lender might request that you close a credit card account(s) in order to qualify.

While closing a credit account could lower your credit score, it would be a minimal change. Your score would be recovered within a year or so.

Is there anything I can do to raise my credit score, before refinancing?

Absolutely.  At THD Credit our program is geared to produce results quickly and efficiently.  In as little as 45 days your credit reports can be cleaned up in order to get approved for mortgages, refinances, lines of credit and auto loans.  Click here to schedule a free consultation. 

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What is a charged off account and how does it affect my credit?

We are frequently asked about charged off accounts and how it affects credit scores. Here is what you need to know…
What is a charge off?
When a creditor notifies credit bureaus that it has charged off a debt, it means the creditor has given up on trying to collect an unpaid debt.
This would happen when someone becomes severely delinquent (typically about six months without payment) and the creditor writes off the debt as a loss in their own accounting books. Since it is unlikely it will be paid in the near future, it can’t be carried on the books as a current asset, therefore the debt is charged off.
This however does not mean you are no longer obligated to pay the amount owed.  As long as the charge-off remains unpaid, the creditor can continue attempts to collect on the account and that may include suing you for what you owe.
How does a charge off affect your credit score?
A charge off is a negative mark on your credit and one of the worst items you can have on your credit report.
Here’s why:
  • One Charge-off account can take up to 150 points off an excellent credit score. The higher your score was to start with, the greater the damage will be.
  • Once a charge-off is on your credit report, it will remain there for seven years from the date it was charged off.
  • Future creditors and lenders may deny any future credit card and loan applications, if they see a charge-off on your credit report.
It is definitely in your best interest to remove charge-offs from your credit report and with some effort we can reduce the negative effects of this type of entry.

Call or email us today if you have questions.

Erik Kaplan
THD Credit Consulting
(800) 822-7120
Send an email to asktheexpert@thdcreditconsulting.com to submit your questions.

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