Whether you’re hoping to increase your credit limit to make a big purchase or simply to raise your credit score, you may be wondering how to get your issuer to grant you additional credit. Some credit card issuers provide card holders in good standing with an automatic credit increase, but you can also take the initiative to ask for additional funding.
How often you get a credit limit increase depends on the card company's policies and your financial and credit standing. While some creditors issue occasional automatic increases as long as you keep your account in good standing, you can usually request an increase manually when you want one.
About Credit Card Limits
Credit card companies put a limit on your account to keep you from charging more than you can handle. If you’ve recently opened your first credit card, your credit limit probably isn’t very high, as you have to prove yourself responsible to earn an increase. Setting limits helps credit card companies protect themselves as they often never receive payment when a cardholder defaults on an unpaid balance.
Requesting an Increase
If you have more than one credit card, request an increase on the one you use the most, as you may benefit from your established history with the company. Unless you really need a large increase, ask for a smaller increment, such as $500 to $1,000. If you have a good payment history, you may be able to receive this increase without having the company pull your credit report, which could cause a small, short-term hit to your credit score. Be prepared to provide a lot of detailed financial information if you need a larger increase. Not only will the company pull your credit report, they’ll want to know about your current employment status and the amount of your monthly rent payment.
Getting an Automatic Increase
You may not have to do anything at all to get a credit limit increase. After you’ve been a cardholder for a minimum of six months to one year, some issuers will automatically increase your credit limit if they feel you are a low credit risk. If you remain in good standing with the issuer, this may occur periodically throughout the time you remain a cardholder.
Options If Declined
Getting declined for a credit limit increase can be discouraging, but don’t give up. If you haven’t had the card for a long period of time, you may simply need to wait a little longer to ask again. However, if you’ve been having trouble keeping up with your payments, you’ll want to get your finances in order prior to making another request.
Benefits of Increased Credit
In addition to the obvious benefits of having the ability to increase your purchasing power, an increased line of credit can actually boost your credit score. According to the credit information website myFICO, 30 percent of your credit score is based on your utilization percentage, which is your amount of available credit divided by the total of your credit card balances. If you increase your available credit but don’t use it, your score can increase.
- CardRates.com: 6 Expert Tips: Increase Your Credit Limit (Get Approved Now)
- Credit Karma: How to Ask for a Credit Limit Increase
- Capital One: Credit Line FAQ
- My Bank Tracker: 4 Steps to Getting a Credit Limit Increase
- MyFICO.com: How FICO Scores Look at Credit Limits
- MyFico. "Credit Checks: What are credit inquiries and how do they affect your FICO Score?" Accessed Nov. 25, 2019.
Laura Woods is a Los Angeles-based writer with more than six years of marketing experience. She has a Bachelor of Arts in communications from the University of Pittsburgh and an MBA from Robert Morris University.