How To Get a Higher Credit Limit: A Step-By-Step Guide
A high credit limit can offer numerous benefits, from increased purchasing power — which could come especially handy in an emergency — to an improved credit score.
While requesting a higher limit isn’t advisable if you’re having trouble paying down your credit card debt, it can be a wise financial decision if you typically don’t carry a balance month to month.
Read on to learn how to successfully request and secure a higher credit limit.
How to get a higher credit limit: a step-by-step guide
There are some things you should know before asking for additional credit. First of all, it’s important to know how credit limits are calculated in the first place.
When you apply for a credit card, the bank will review your credit score, debt-to-income ratio, credit utilization ratio and credit mix. This will help them determine whether you’re likely to repay your debts on time or if you are at a high risk for defaulting on debt.
Borrowers with good credit scores and high incomes will most likely receive higher credit limits than those with poor credit histories and lower incomes.
This means that if your credit score and income have risen since you first got your card, you have a good chance of getting a higher credit limit.
Here are the steps you need to take to request a credit limit increase.
1. Check your credit report and score
The first step is to get a copy of your credit report, preferably from all three major credit bureaus: Experian, TransUnion and Equifax. This will help you get a clearer view of your financial situation.
Note that, in order to see your FICO score — the credit scoring model most lenders use — you might have to purchase credit reports from the bureaus themselves. While many websites offer free credit reports, these typically do not include scores or might only include the score from a different and less-used scoring model, the VantageScore.
Once you have your report, it’s important to analyze it carefully, checking for negative marks and/or inaccurate items. (If this is your first time analyzing your report, or need a refresher, make sure to check out our guide to how to read your credit report.)
Note that, if you find mistakes or outdated negative items in your credit report, you should dispute these items with the credit bureaus. By law, they’ll have 30 days to investigate and must eliminate the items from your report if they’re inaccurate.
And, if you discover you have multiple errors in your report — perhaps due to identity theft or other financial issues — you could consider a credit repair company that can dispute the errors for you.
Next, you should evaluate your score and see where it falls in the ranges outlined below.
Borrowers with credit scores that fall in the very good and exceptional ranges will have the best chances of successfully requesting an increase to their credit limit. If your score falls in the “good” range but shows significant improvement since you first opened the account, your request for an increase might also be granted.
If your score is in the fair and poor range, the best thing to do is to take some time to rebuild your credit before applying for an increase.
2. Evaluate your credit card usage — and pay down debt if necessary
Your credit utilization ratio, which is an indication of how much of your available credit you’re using, plays an important role in your credit score and weighs heavily in lenders’ decisions. One quick way to raise your credit score and increase your chances for a higher credit limit is to decrease that ratio by paying down your credit card debt.
You’ll have a better chance at successfully requesting an increase if your utilization ratio is under 30%, preferably in the single digits. If you find that your ratio is too high, it’s a good idea to pay down your debt before asking for an increase.
3. Get your documentation ready
Each credit card issuer will have different criteria for credit limit increases; however, you should be prepared to provide evidence of your income and employment status in case they request it. This could be in the form of your wage and tax statements (Form W-2) or recent paystubs.
4. Check your timing
Timing can be crucial with a credit limit increase request. It’s best to avoid requesting one shortly after opening a new credit account (which can impact your credit score) or when you have high credit card balances. It’s best to pay down cards significantly and wait a few months for credit bureaus to catch up with your new, lower credit utilization ratio.
5. Contact your credit card company
Once these pieces are in place, you can request a credit limit increase in several ways:
- Online. Most major card issuers offer the option to request a credit line increase right on their websites.
- By mail or e-mail. Some issuers allow for written requests, which you can send via snail mail or e-mail.
- Phone. Calling the number on the back of your card and speaking to a customer service representative might still be the best option, especially if you’d like to explain how your credit score and income has increased since you first opened the card. It also allows you to receive immediate feedback in case your request is denied.
What if they deny your request?
If the credit card issuer denies your request, you should ask for feedback as to why. This allows you to finetune your strategy and try again in a few months. For example, if your credit score just hasn’t improved enough, it’s a good idea to spend at least six months paying down debt and building a stronger on-time payment history and then try again.