How to Get a Higher Credit Limit

If you’re looking to give your credit score a boost, one way to do it is by increasing your credit limit. Here’s how to get a higher credit limit.

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Check your credit report

If you check your credit report and find that you have a high credit score, you will likely be approved for a higher credit limit. Credit scores are based on your credit history, so if you have been using credit responsibly for a long time, your score will reflect that.

Another factor that will be considered is your income. If you can prove that you have a high income, you will be more likely to be approved for a higher credit limit. Lenders want to see that you have the ability to repay the debt, so they will look at your income to determine if you can afford to make the payments.

Lastly, the amount of debt you currently have will be considered. If you already have a lot of debt, it may be difficult to get approved for a higher credit limit. Lenders want to see that you can manage your existing debt before they approve you for more.

Dispute any errors

The first step is to get a copy of your credit report from all three credit reporting agencies: Equifax, Experian and TransUnion. Once you have your reports, go through them carefully to look for any errors. If you find any, file a dispute with the credit reporting agency. The agency has to investigate the error and remove it if it finds that it’s indeed incorrect.

Bring balances below 30%

The first step is to lower your credit utilization. Credit utilization is the percentage of your credit limit that you use. So, if your credit limit is $1,000 and you have a balance of $500, your credit utilization would be 50%. Most experts recommend keeping your credit utilization below 30%.

If you have a balance that’s close to your credit limit, or if you frequently find yourself using more than 30% of your credit limit, it’s time to take action. One way to lower your credit utilization is to pay down your debt. Another way is to ask for a higher credit limit from your card issuer.

If you carry a balance on more than one card, focus on paying down the card with the highest interest rate first. Once you’ve paid off that debt, you can work on paying down the other cards. As you pay off debt and lower your credit utilization, you should start seeing an improvement in your credit score. And as your credit score goes up, you may become eligible for a higher credit limit.

Use credit regularly

Opening new credit lines and using them regularly is one way to get a higher credit limit. Lenders like to see that you’re using the credit that you have available to you, and they’ll often reward you by increasing your credit limit. You don’t need to go overboard with your spending, but try to use your credit cards for small purchases on a regular basis. Just be sure to pay off your balance in full each month so you don’t end up paying interest on your purchases.

Another way to get a higher credit limit is to ask for one. If you’ve been a good customer of your lender and have always made your payments on time, there’s a good chance they’ll be willing to give you a higher limit. You can either call customer service or send a letter asking for an increase in your credit limit. Be sure to state why you think you deserve an increase, such as having a good payment history or needing a higher limit for business purposes.

If you have a high income or substantial assets, you may be able to get what’s called a “secured credit card.” With this type of card, you put down a deposit that serves as collateral in case you don’t pay your bill. This deposit is typically equal to your credit limit, so by definition, you’ll be getting a higher limit with a secured card than with an unsecured card. Of course, the downside is that if you don’t make your payments, you could lose your deposit.

Request a credit limit increase

Request a credit limit increase: You can usually request a credit limit increase online, over the phone or in person at a bank or credit card issuer’s branch office. When you request a credit limit increase, the issuer will most likely conduct a hard pull of your credit report, which could temporarily lower your credit scores. If you’re denied or only approved for a small credit limit increase, don’t despair. You can try again in six to 12 months. Also, use your new credit responsibly to help boost your chances of being approved for future requests.