If you have a credit card with a low credit limit, you may be interested in raising your credit limit.
In this article, we will talk about why your credit limit is important, the reasons for raising your credit limit, when and how to boost credit score, and how to request more.
Keep reading for what you need to know about how to increase your credit card limit.
How Does Your Credit Limit Affect Your Credit Score?
The most obvious reason you care about your credit line is that it controls the amount you can spend on certain credit cards. But outside of that, your credit limit also indirectly affects your credit score.
Although the credit limit itself is not a component of credit scores, it does play a role in your credit usage ratio which is an important part of your score. In fact, the credit usage category makes up about 30% of a FICO score.
How to increase your credit limit
There are several strategies you can try if you decide to increase your credit limit.
Wait for the credit card issuer to automatically increase your credit limit.
After you receive the credit card at the specified time, the end payers will often automatically exceed your credit limit, provided that you use it responsibly and pay your bills every month. However, you usually have to wait at least six months after opening the card before considering increasing the loan limit.
Request an increase in credit limit.
If you’ve not received an automatic credit limit increase, you’ll request one. You can do that over the phone or on the credit card issuer’s website.
Generally, if you apply for an extension of a credit line using your bank’s online portal, this will result in a stringent credit crunch. However, if you call your bank and speak to a representative, you can only be approved for an increase through a soft investigation depending on the situation.
When you request a credit line increase, you should be prepared to provide your total annual household income, your employment status, and the amount of your monthly rent or mortgage payment. Credit card issuers usually say that if that person’s income is used to pay your expenses regularly, you can include income from someone else.
Will requesting a credit limit increase affect your credit score?
Depending on the request giver and the amount you are requesting, the credit card provider may conduct a soft or rigorous investigation into your credit. The credit issuer will want to see what your credit report looks like and whether you have been a liability or recipient in the past before taking the risk of giving you more credit.
Check with your credit card issuer to see if requesting a credit limit increase would trigger a soft or rigorous investigation.
As we discussed “Is the investigation really killing your credentials?“A tight pull can lower your credit score by a number of points, but it’s not the top of the planet.
This shouldn’t cause too much trouble as long as you keep your searches to a minimum.
Your recent inquiries into your credit report are when you begin to see that you are desperate for credit and that payers may deny you.