How to Increase Your Credit Limit
By Greg Knotts
This guide explains how to increase credit limit, provides credit line increase tips and how a credit limit increase impacts credit score.
How to get a credit limit increase without asking
- Always pay your bill on time
- Try to pay your bill in full if possible
- Use only a portion of your credit limit
- Update your income with the credit card company
- Keep your credit card account open for a minimum of six months
- Pay down the debt you owe
This guide and its editorial content explain how to apply for a credit limit increase, provide tips for getting that increase and offer insight on ways to raise your credit score.
Getting a credit limit increase is amazing. It’s the kind of experience that feels like getting a promotion at work or better yet, a raise.
An increase to your available credit is a watershed moment in your credit history, more so if you’re rebuilding a bad credit score or you are brand new to having a credit card.
An increase to your credit limit is both a warm, fuzzy feeling and a key indicator that you are responsible with your credit spending.
A bigger credit limit vastly improves your purchasing power. But that’s just one of the advantages obtained when you increase your limit. A higher limit can have a positive impact on your credit score, as well — as long as you maintain a healthy credit utilization rate.
Something important to know about your credit card is that thirty percent of your credit score from the three major credit bureaus gets calculated based on your level of debt.
What that means is your credit utilization or the amount of available credit you’re using, is one of the biggest parts of your credit score. And a credit limit increase will instantly lower your credit utilization ratio because of how it affects the math.
That means if you raise your credit limit and keep your debt the same or pay some of it down, you automatically get a higher credit score.
Getting an automatic credit limit increase
Some credit card companies make it easy and automatically raise your credit limit. They do automatic increases when you hit benchmarks that tell them you handle credit responsibly.
Those benchmarks include maintaining a manageable credit utilization rate and consistently making your monthly payments.
A lot of credit card servicers review their customers’ accounts periodically and will automatically raise the credit limit for some of their cardholders.
Their goal is to help you build credit and help you qualify for better options. The stronger your credit, the better it is for both the credit card company and for you, the customer.
So, in some cases, the best time to ask for a credit card increase is never. Instead, wait for an automatic review — whether it’s your Discover it® card or your Hilton Honors American Express.
Ask the credit card servicer directly
Some credit card servicers will only raise your credit limit if you ask. There are usually two ways to initiate the inquiry process:
Call your credit card customer service
The easiest and most direct way to start the inquiry process is to call the toll-free number your credit card servicer provides. Once you call, listen to the system prompts.
Usually, there are instructions provided for requesting a credit limit increase. If no prompt is available, wait for the chance to speak to a live customer service representative. Once you’ve got a human, ask them about increasing your credit limit.
Do it online
These days, a lot of credit card servicers let you request a credit limit increase online. To do it that way, log in to your account and look for the button or menu option related to credit limit increases.
Continental Finance, a credit card marketer and servicer of the Surge Mastercard that is issued by Celtic Bank, lets people check for a credit limit increase at this site.
No matter the credit card you have, when reaching out to a credit card servicer be prepared to provide additional information including monthly income, the amount of credit limit increase you want, and the reason you want the increase.
Does requesting a credit limit increase hurt my score?
According to U.S. News, yes, in some instances requesting a credit limit increase can hurt your credit score.
Just like when you apply for a credit card, the act of asking for an increase to your credit lines will initiate a look into your credit history.
Depending on the type of inquiry, this can affect your credit score.
There are two kinds of credit pulls, according to the Consumer Financial Protection Bureau: A soft inquiry and a hard inquiry.
- Hard inquiries. These are typically inquiries by lenders after you apply for credit. These inquiries will impact your credit score because most credit scoring models look at how recently and how frequently you apply for credit.
- Soft inquiries.These are reviews of your credit file, including reviews of existing accounts by lenders, prescreening inquiries by prospective lenders, and your requests for your annual credit report. These will not change your credit score.
But your credit score is only affected by one of them. A hard inquiry can affect your credit score.
Depending on the card servicer, a limit increase request will sometimes trigger a hard pull on your credit report. This hard pull can hurt your credit, especially if you have a short credit history.
If you call your credit card customer service, you can ask whether a hard inquiry will be initiated. So don’t hesitate to ask your credit card servicer whether they’ll do a soft or hard credit check beforehand.
Extra Tip: Increase your security deposit
Some credit cards are called secured. A secured credit card requires a cash security deposit and this, in turn, reduces the risk to the credit card company.
So one sure-fire way to increase your limit, if you have a secured credit card, is to pay more towards your security deposit. To do so, the best bet is to contact customer service and have them provide the proper steps to do this. Each credit card servicer has a slightly different process.
How soon is a credit limit increase decision made?
If your credit card account is in good standing and you can demonstrate that you have enough income to handle a higher credit limit, many times you’ll find out immediately if your request was approved.
Sometimes, though, the process takes a bit longer and your credit card servicer will sometimes notify you a few days later via mail.
What to do when a credit limit increase gets denied
A credit limit increase can be denied by a credit card servicer for a variety of reasons including:
- The credit card account may be too new
- It may be too soon since a previous credit limit adjustment
- You may not have enough income to qualify for an increase
- Or, you might simply have an account that doesn’t receive any total credit limit increases
Beyond those common reasons, negative marks on a person’s credit history are often the reason a credit limit increase gets denied. The Consumer Financial Protection Bureau details what happens when you are denied because of something on your credit report.
Much of that same information also applies in this instance. And if that is the case with your credit limit increase request, you will receive an adverse action letter. This letter is required to explain in detail the factors that caused the adverse action. Common factors include missed payments or high balances. You’ll also get a free credit score report if your score was used in the decision to decline your request.
If your request was denied:
- Pay attention to the reason(s) given in the letter
- Take actions to improve your credit in those areas
- Continue to make payments, even if only minimum payments, on time
- Wait a few months, and then try again
Author: Greg Knotts
Greg Knotts is the VP of Marketing, CDMP, at Continental Finance Company, LLC in Wilmington, DE. A persuasive and results driven leader, Greg has more than 20 years experience in marketing, operations, relationship management, sales and business development in the credit card industry. He spearheads the Continental Finance Blog and leads the company mission to help cardholders everywhere rebuild and restore their credit through the variety of educational resources, articles and graphics the blog provides each week. View all posts by Greg Knotts
