When you ask your credit card issuer to increase your credit limit, you can not only increase your purchasing power, but also reduce your credit utilization, which can help building up credit score. However, it significantly depends on time whether your request is approved or not. It is said frequently that when you don’t need a credit increase that’s best time to ask for it.
Best time to request a credit limit increase
When you get apromotion recently: An increase in revenue means that you can cover anincrease in the cost of handling credit cards. Note: You may need to prove yournew income to have a higher credit limit approved.
Whenever credit scoreis good: A good credit score indicates that you are responsible for theborrowed money to your credit card issuer. You are therefore more likely tomake timely payments and understand how much you can afford to charge everymonth. Remember, good credit is not the same as good financial health, butcreditors consider that both things are linked with each other.
Whenever you have anice track record: If your all payments are on time and your card has neverbeen used at maximum limits then fortunately you are more likely to be approvedfor a limit increase. A long withstanding with same creditor (like 6 months toa year) can also increase chance for credit limit approval.
TIP: Remember that high credit utilization and late payments probably indicate a trouble with finance.
Worst time to request for a credit limit increase
If you have recently asked for credit limit increase elsewhere or you have applied for a credit card or a loan. A bustle of new credit requests more likely indicates towards a financial distress. Whenever you apply for a credit limit increase or request for a new credit your credit report contains a hard inquiry. Keep in mind that credit applications always set-off a penalty to credit score, that probably hurt your credit report, particularly if you have a short credit history.
When you move to alow-paying job: Keep in mind that if you have lately move to a lower-payingjob, then it’s not a right time for a credit limit increase, even if salary ismore fulfilling. Your purchase power is lower than before, so the issuer thinkstwice before making decision & will not allow a credit increase.
Whenever your credit is fluky: Don’t have a good or excellent credit score; you will probably not receive approval for more credit due to poor performance in recent credit assessments. So, before you request a credit limit increase build your score.
Whenever going abroad: Going overseas will likely makes you susceptible for credit card fraud in the eye of issuer. Traveling can also lead us to spend more due to financial inhibitions. By requesting a credit increase, you are giving a leeway to yourself for a costly credit card bill waiting at your back for payment.
Why Shouldn’t I try when it’s not a right time?
Often requests for credit limit increase triggers a sturdy impact on your credit report specifically, for a person with a short credit history. If you are making a call to card issuer, you can ask him/her whether it will commence a hard inquiry or not. There is also another option available sometimes where one can increase slightly and forego the sturdy impact.
If you want to increase your credit limit and have decidedthat it’s perfect time to do so. Then for that purpose one can either applyonline or call customer service to request increase.
There’s always a right and wrong way to do anything. Toincrease the chances for approval follow the guidelines available above. Andalways try to keep your credit report in good condition simply by paying yourcredit card balance in full every month.