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Timing is everything.
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Securing a credit limit increase doesn’t just enable you to charge more to your credit cards each month. It can also help raise your credit score by lowering your credit utilization ratio. But requesting a credit limit increase isn’t always a smart move.
Certain factors can make you more likely to get denied, and that could hurt your credit score. So it’s best to make sure you check the following boxes before you request a credit limit increase in 2023.
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You haven’t applied for a credit limit increase in the last six months
Credit card issuers don’t give out credit limit increases too often, so it’s best to request them no sooner than six months after your last credit limit increase. Creditors will want time to see how you handle your most recent credit limit increase before you request another one. If you apply too soon, there’s a greater chance you’ll get denied.
You’ve been paying your credit card bill on time
You’re more likely to be approved for a credit limit increase if you’ve been consistently paying your bills on time. Late payments might suggest to a creditor you’re already struggling to pay back what you borrow. Enabling you to spend more money each month could increase your risk of default, which is something all credit card issuers want to avoid.
Your income has remained the same or has increased
Many credit card companies ask for information about your annual income when deciding whether to grant you a credit limit increase. They use this to assess how much money you’ll have coming in and how much you can conceivably borrow without defaulting.
Those whose income has risen since they first opened the card or since they last requested a credit limit increase have a better chance of success than someone whose income has declined over time.
Ready to apply?
Some of the largest credit card issuers enable you to request a credit limit increase online, but often, you’ll have better luck if you reach out by phone. This gives you an opportunity to plead your case, highlighting your good payment history and explaining why you think you deserve an increase. If you’ve already been pre-approved for a higher limit with one of the company’s competitors, you can bring this up as well. Credit card companies don’t like to lose customers, so they may offer you an increase just to keep you from leaving.
If you know what kind of an increase you want, you can ask for that directly, but be prepared to negotiate. You’ll usually have to agree to a hard inquiry on your credit report, which can drop your credit score by a few points. Some companies may increase your limit with just a soft inquiry, which doesn’t affect your score. But these increases are usually smaller.
No matter what, there’s no guarantee that you’ll get approved for your credit limit increase. But if you meet the criteria above, you stand a good chance. And if you’re denied, reach out to the credit card company to learn about why it denied you. Then, try to correct the issues it cites before you try requesting another credit limit increase.
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