Does Requesting a Credit Limit Increase Hurt Your Credit Score?

Does Requesting a Credit Increase Hurt Your Credit Score?

Requesting a credit limit increase can temporarily lower your credit score, since making the request will likely result in a hard inquiry on your credit report. The credit card issuer will check your credit history, along with other factors, to determine whether there's a risk that you won't pay your bills as agreed if you receive a higher credit limit. A hard inquiry can lower your FICO^® Score^Θ by up to five points, but the effect will dissipate after one year.

After the initial dip, your credit score may increase when you get a higher credit limit. That's because your credit utilization ratio will likely decrease, as long as you keep your credit card balances low. Credit utilization is the amount of available credit you're using, and it's one of the most important contributors to your credit score; keeping it as close to 0% as possible will strengthen your score.

For example, if you have a balance of $500 on a card with a $1,000 credit line, your credit utilization will be 50%. But if you increase your credit limit to $2,000, your credit utilization immediately drops to 25%, which will generally help your credit scores.

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When Should You Request a Credit Limit Increase?

Consider requesting a credit limit increase in these scenarios, since the chances are higher it will be successful:

• Your income has increased. Credit card issuers often consider income when determining whether you qualify for a credit card, and whether you qualify for a higher credit line after you've gotten the card. More income alone won't necessarily lead to a successful request for a higher limit, but if it lowers your debt-to-income ratio (DTI)—the amount of income that goes toward debt payments each month—it will typically make you a stronger candidate.
• You've established positive payment history. The credit card issuer will also look at your payment history on this card and your other credit accounts. If you have a stellar record with no late or missed payments, you're more likely to be approved.
• Your credit score has gone up. Your credit history is a major factor in whether the issuer will grant your request for a high credit limit. If your credit score has improved since you first got the card, you may qualify for more spending power because the issuer trusts you'll be able to manage it without missing payments.
• You've paid down other debts. In addition to earning more income, paying off debt is another way to lower your DTI, which can increase the chances you'll get a higher limit.
• You need or want more spending power. Increasing your credit limit may make sense when you plan to make a big purchase and you want the opportunity to pay it off over time, or if you regularly hit your limit and you want more flexibility.

When Should You Avoid Requesting a Credit Line Increase?

Rethink requesting a credit limit increase in these scenarios:

• Your budget can't handle increased spending. Even if you don't plan to take on new or additional debt with a higher credit line, the option is there to spend more. Avoid asking to increase your credit limit if you're already having a hard time paying bills or saving money on your current income.
• Your income has decreased. If your income has gone down or your DTI has gone up, it's less likely the credit card company will approve you for a higher credit limit.
• Your credit score has dropped. Similarly, a lower credit score—particularly, recently missed payments or a number of hard inquiries on your credit report—are indicators to issuers that there's a risk you won't be able to make payments toward new debt.
• You plan to apply for a mortgage. Asking for a higher credit line may lead to a hard inquiry, which could be a red flag for mortgage lenders and affect your chances of approval. Ask the issuer whether they'll run a credit check as part of a credit line increase request if you're considering applying for a mortgage in the next several months.

Learn more: Asking for a Credit Limit Increase vs. Getting a New Card

How to Request a Credit Line Increase

Take these steps to ask an issuer for an increase to your credit limit:

1. Submit an application online. In your credit card issuer's app or on your online account, sign in and fill out a form to request a credit line increase. You'll typically need to include your current income and the amount you spend on housing costs per month.
2. Or call the issuer if you prefer. You can also call the issuer's customer service number and request a higher limit via phone. Be prepared to confirm your account details and provide income and housing cost information.
3. Wait for an automatic increase. The company might also approve you for a bigger credit line based on data like your credit score, income or payment history. They might offer you a credit limit increase spontaneously, or ask you for updated income—which, if it meets their qualifications, could result in a higher credit limit. Some issuers regularly consider credit line increases every six to 12 months.

Tip: When you request an increase, you might receive a response immediately. But if the company needs to verify your details or take a deeper look into your credit history, a response could take up to 30 days.

The Bottom Line

Increasing your credit limit could cause a brief, minor drop in your credit score if the issuer conducts a hard credit inquiry as part of the application process. But if you keep your balance as low as possible, a higher credit line will likely lead to a stronger credit score, since it will give you the opportunity to lower credit utilization on the card. Make sure your finances and spending habits can handle a higher limit—and that your credit score will benefit from it long-term—before moving forward.

You can see where your credit stands before you apply for a credit limit increase—and how a limit increase affects your scores—with free credit monitoring from Experian.