Its credit limit is not just an expense limit: it plays a key role in its credit score and its general financial flexibility. If you just opened a new card or have had the same for years, increasing their limit can help reduce their Credit use and Increase your credit score.
But how is an increase obtained? Here are three strategies to help increase your credit limit, in addition to what you need to know about when to request an increase, how much to request and what to do if your application is denied.
3 ways to increase your credit limit
Wait for an automatic increase
One of the simplest ways to obtain a higher credit limit is to wait, although that does not mean doing nothing. Credit issuers regularly check the accounts, and many offer increases in automatic credit limit to card holders that demonstrate responsible use.
To improve your chances of receiving an increase:
- Use your card regularly, but stay well below your credit limit to improve your credit use.
- Make payments on time, ideally paying your balance in its entirety every month.
- Consider Automatic payments configuration to make sure that an expiration date is never lost.
Many emitters reassess the accounts every six months to a year, and some require at least six months of accounts history before approved an increase. If you constantly use your card and pay it responsible, you can receive an increase in credit limit without even having to ask.
Related: 3 things to do to increase your chances of obtaining an increase in the automatic credit limit
Request an increase to your credit line
If you do not want to wait for an automatic increase, you can adopt a more proactive approach requesting one yourself. While it may seem bold, applications for increasing credit limit are common, and many emitters make the process fast and easy.
In general, you can request an increase through your online account, through the mobile application or calling customer service of your card issuer. Before sending your application, prepare to provide key financial details, such as:
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- Your total annual income
- Work status
- Monthly mortgage or rental payment
It is also possible that you should specify how much increase is requesting and why you need it.
Keep in mind that some issuers can make a difficult credit consultation, which could temporarily reduce your credit score. The smaller increase requests are more likely to result in a soft attraction, which will not affect your score, but it is still worth verifying with your issuer in advance.
Related: What is the difference between a hard and soft attraction in your credit report?
Request a new card with a higher credit limit
While it may not be the first option that comes to mind, requesting a new card It can be an effective way to increase your general credit limit and reduce your credit use ratio.
If you have a solid credit history and a good relationship with your bank or issuer, you can qualify for a higher limit, especially if you are considering a premium card as American Express Platinum Card® or the CHASE SAPPHIRE Reserve®.
The best part of this strategy is that even if your new card does not have a higher individual limit than the existing one, it still adds to its total credit available. This can help reduce your credit use, which can, in turn, increase your credit score over time.
However, keep in mind that requesting a new credit card will probably result in a difficult consultation of your credit report, which could cause a temporary drop in your score. The impact is usually less and short, especially if it continues to pay time on time and administer your credit in a responsible manner.
Related: The 6 best credit cards with the highest credit limits
Why your credit limit is important
Its credit limit is the key to its credit use, one of the most important factors in its credit score. Credit use represents about 30% of its Fico scoreand keep it below 30% is generally recommended to maintain good credit.
Related: What is a good credit score?
How credit uses
Its use is calculated by dividing your total credit balances by its total credit limit. Here is an example:
- Card No. 1: $ 1,000 balance, $ 5,000 credit limit
- Card No. 2: $ 2,000 balance, credit limit of $ 10,000
Its total balance is $ 3,000 and its total credit limit is $ 15,000, so its use is 20% ($ 3,000 divided by $ 15,000). Since the use of your credit is much lower than 30%, this is considered a healthy percentage.
How to increase your credit limit can help your credit score
One of the easiest ways to reduce your credit use, and potentially improve your credit score, is to increase your total available credit without increasing your expense.
For example, if the credit limit increases on card No. 1 from $ 5,000 to $ 6,000, its total credit limit increases to $ 16,000. Without changing its expense, its use would reduce to 18.75%, which could help increase your credit score over time.
Important credit limit considerations
When should I request a credit increase?
There is no rule of duration and fast, but it must generally request an increase in credit limit only when you have a solid reason, such as a recent increase or a desire to reduce your credit use to improve your credit score. If you need to call your issuer, get ready to explain your application.
However, some emitters have restrictions, which require their account to be open for at least 60 days or six months before they can request an increase. It is better to verify the policy of its issuer before requesting.
Related: When is it time to request an increase in the credit limit?
Does requesting a credit limit increase my score?
In the short term, yes, requesting an increase in the credit limit can damage your credit score. If your sender makes a difficult query, your score can be reduced by five to 10 points.
Related reading: How to verify your free credit score
In the long run, a higher credit limit can help increase your score by reducing your credit use, provided it maintains responsible expense and continues to pay time.
However, remember that having more credit is never a good reason to unnecessarily borrow more than you need. Responsible spending habits and payments on time They are the most effective ways to improve your credit score over time.
How long is a credit limit takes?
It is possible that you can obtain an answer in an increase in credit limit instantly, either online or by phone. For example, after having the card for about three months, a former TPG taxpayer requested a $ 1,000 increase in his American Express Blue Cash Cash.
This provided a small boost to its existing line of credit and almost did not take time, since they requested the increase through the AMEX online portal, they verified their annual income information and received a positive warning in less than a minute.
Related: Credit Cards 101: The Beginner Guide
Some answers are not so fast. Like a application for a new credit card, you can receive a warning that your application is being reviewed. In this case, it is possible that you should wait for seven to 10 business days to receive an answer by mail.
How much is too much for an increase in the credit limit?
A good general rule is to request an increase from 10% to 30% at its credit limit. Ask too much, such as duplicating your limit, you can raise red flags for emitters, making them more likely to deny your application.
If you have a solid history of credit and income to support a greater increase, you can try more, but it is better to be realistic and gradual with your applications.
What happens if the increase in the credit limit is denied?
If your application is denied, do not scare. Issuers can reject an increase due to high credit use, recent backward payments or insufficient income. Improving these areas can help your possibilities of being approved in the future. You can try again in six months, since the issuers generally reassess the accounts periodically.
End
An increase in the credit limit could help increase your credit score by increasing your total credit available and, therefore, reducing your use ratio, but only if you use credit in a responsible manner. More credit is not a license to spend more, but if it manages it wisely, there is no reason to miss the opportunity. Many emitters offer rapid and automated application systems, which makes the process simple and without problems.
