How much of a credit line increase you should ask for depends on many factors. In general, it does not do your credit any favors to increase your limit unless the increase is definitely needed. You should be aware that increasing the limit on one card may impact your ability to increase your others. Generally, you can increase your credit limit on a personal line of credit simply by requesting one. Depending on the increase requested, you may be granted one without heavy scrutiny. Some banks may also provide you a credit increase automatically if your credit habits are good. How to Increase Your Line of Credit
How Much of a Credit Line Increase Should I Ask For? FAQs
Generally, asking for too large of an increase may trigger a review of your account resulting in the lender denying the request or reducing it to a smaller amount than requested. It is recommended to make reasonable requests that are within your capability to pay back.
Yes, if you do not manage your payments on the increased credit line responsibly, it could affect your credit score negatively. Additionally, if you are increasingly reliant on higher amounts of debt to make ends meet, it is important to review your financial budget to ensure you can make your payments on time.
You can usually request a credit line increase multiple times, although the frequency of requests may vary from lender to lender. Requesting increases too often could lead to your application being declined or reduced in amount due to a review of your account.
Yes, lenders use your credit score and other factors to determine the amount they are willing to offer you as a credit line increase. Generally, higher credit scores tend to get larger increases than those with lower scores.
When you apply for the increase, your loan provider will make a ‘hard inquiry’ which may result in a minor dip in your score. However, if you manage your payments on the increased credit limit responsibly and pay them back on time, it will have a positive effect on your credit score.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.