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News: When To Ask For A Credit Limit Increase - Credit-Land.com

You can ask your credit card issuer to increase the credit limit on your credit card every six months. A higher credit limit can give you more buying power and help your credit score by lowering your credit utilization ratio. However, whether your request will be approved is a matter of timing. A good time to ask for a credit limit increase is when you are confident that you won't overspend and will be able to pay off by the due date to avoid interest payments.

Here are some of the best times to request a credit limit increase:

  • When your credit has improved: your credit score can impact whether you qualify for a higher credit limit. As a rule, higher credit scores mean higher credit limits.
  • When you get a raise: when you get a raise, you can update the income listed on your credit account, which will allow you to request a credit limit increase or get an automatic credit line increase.
  • When you have a good credit history with the issuer: card issuers can review your history with them when considering a credit limit increase request. A long history of on time bill payments may improve your chances.
  • When you paid off or closed other credit accounts: card issuers may consider your debt-to-income ratio (DTI), which is your monthly income compared to your loan payments. With a lower DTI, it is possible to qualify for a higher credit limit.

When you are sure you will be able to manage a higher credit limit without growing your debt, you can go ahead and request a credit limit increase. However, there are times, when it is not recommended to ask for a higher line of credit. For example, it might be wiser to wait when: you just opened a new credit account or got a credit limit increase, recently missed bill payments, when your income has decreased, when you have bad credit, or you maxed out your credit card.

Once you decide you need a higher credit limit, you can contact your credit card issuer and request it. Card issuers generally let you request a credit limit increase by submitting a quest via your online account or bank app, or by calling your card issuer directly. To be prepared for it, you will need the following information handy: annual income, employment status, and monthly housing payments. Some issuers may allow you to request a new desired credit limit. However, there's never a guarantee you will be approved the exact amount.

The issuers are usually able to provide an instant decision on whether you are approved for a higher credit limit or not.

tags : Finance Money Management Credit Limit

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