Frequently asked questions about credit limit increases
Quick insights
- Increasing your credit card limit may affect your credit score.
- Card issuers assess your credit score, payment history, income, credit utilization and other factors when you request a credit limit increase.
- Some credit card issuers may automatically increase your credit limit if you demonstrate responsible credit habits.
There are many reasons you might want to request an increase to your credit card limit. Whether you’ve increased your income or are looking for more flexibility within your credit, a credit increase can provide more possibilities.
In this article, we’ll cover some frequently asked questions about credit increases, including how to request one, how they could affect your credit and what credit issuers consider as a part of the approval process.
What is a credit limit increase?
A credit limit increase occurs when a credit card issuer raises the maximum amount a cardmember can borrow with their credit card. Credit limits are initially set based on factors like credit score and income, but they can change over time due to improved creditworthiness or issuer policies.
An increased credit limit can enhance purchasing power and positively affect credit utilization, which is the ratio of credit used to credit available. Credit limit increases can be automatic or requested by the cardmember, depending on the issuer's policies and the cardmember's account history.
How can I request a credit limit increase?
You can request a credit limit increase through a few methods, including:
- Make a request online: Many credit issuers allow cardmembers to request a credit limit increase through their online account accessed via their website or mobile app.
- Call customer service: Most credit cards have a customer service number on the back. When you call the number to request a credit increase, you may have to answer some questions regarding your request and financial situation, but if you meet the requirements they can put in a request for you.
- Visit a bank branch: If you are near a brick-and-mortar location of your card issuer, you may be able to speak to a customer service representative at the branch who can assist you with a credit limit increase request.
You may need to have up-to-date financial information ready, such as your current income and employment status, to support your request.
Approval times can vary, but issuers typically respond within a week.
What factors do issuers consider for approval?
There are many factors considered when you request a credit limit, including your:
- Credit score
- Income
- Payment history
- Existing debt
- Overall credit utilization ratio
Maintaining a positive relationship with your credit issuer (by making timely payments and keeping balances low, for example) can improve your chances of approval. Some issuers also may have specific policies or criteria, such as a minimum account age or spending threshold, that influence their decision.
How does a credit limit increase affect my credit score?
Requesting a credit limit increase may result in a hard inquiry on your credit report, which can temporarily lower your credit score—usually only by a few points. However, a higher credit limit can improve your credit utilization ratio, potentially boosting your credit score in the long term.
The impact on your credit score can vary based on your overall credit profile and the number of recent inquiries. Spacing out credit-related inquiries and maintaining a low balance relative to your credit limit may help to minimize negative effects.
What are the benefits of a credit limit increase?
A few key benefits of a credit limit increase include:
- Improved credit score: A higher credit limit can improve your credit score over time by reducing your credit utilization ratio, a key factor in credit scoring models.
- More flexibility: A higher credit limit provides additional financial flexibility and purchasing power, allowing you to make larger purchases or handle emergencies more easily.
- Access to new credit cards: Some premium credit cards have minimum credit limits. With a higher limit, you may qualify for more cards, some of which may have more benefits and rewards.
Can credit limit increases happen automatically?
Automatic credit increases can happen, but they will depend on your card issuer as well as the card you have. Your card issuer may consider automatic increases based on factors like consistent, on-time payments, paying more than the minimum payment and an income increase.
Automatic credit increases by your card issuer generally result in a soft pull of your credit, which does not impact your credit score. It can be helpful to monitor your credit card account regularly to stay informed about any changes to your credit limit.
What should I do if my credit limit increase request is denied?
Here are a few actions you may want to consider if your credit limit increase is denied:
- Review your credit report to confirm there aren’t any inaccuracies or discrepancies.
- Review correspondence from the credit issuer. They are required by law to send a letter explaining their reason for the denial.
- Work on improving your credit score by making timely payments, increasing your income or reducing your existing debt.
You can typically apply for an increase again in another six months to a year.
In summary
Credit limit increases can be initiated by the cardmember or, in the case of some card issuers, given automatically. A credit limit increase request can result in a hard pull of your credit, which can temporarily, negatively impact your credit score. But having a higher credit limit can potentially increase your credit utilization, which can positively impact your credit score.
When you request an increase, card issuers consider factors like income, payment history, credit score and credit utilization ratio as part of their approval process. If you are denied a credit limit increase, you may want to review your credit report or find ways to improve your credit score through consistent, on-time payments or by decreasing your debt.
