Credit limit increase can be beneficial to you in many ways. When considering a credit line increase, companies may look at a variety of factors. However, the process isn't quite as difficult as one might think. When should be the right timing to ask an increase? Below are factors you should consider before asking for a higher credit line:
Why Do I Want a Credit Limit Increase??
Ask yourself why you want a credit limit increase. Is it in hopes of raising your credit score? Or just thinking of spending it to cover unnecessary expenses? Have a good reason before you seek an increase. Only ask for an increase if you can handle your current obligations responsibly.
There are many factors to consider when deciding whether or not you are eligible for an increase, but payment history ranks the highest. If you’ve had a credit card account open for at least 6 months and have been making on-time payments, your chances of getting a limit increase are a lot higher. On the other hand if you have been late even once in the last 6 months, you should not request a credit limit increase.
Don’t ask too soon or too much
The general rule is that you should wait at least six months before requesting a credit limit increase. Most credit card companies will review your credit after about six months. Some will automatically raise your credit limit after a number of timely payments. Also, when requesting a limit increase, don’t over do it! Don’t ask for too much, you might look desperate and thirsty . Be conservative in your desired credit limit, ask for 25 to 50 percent of your current limit.
Income and employment information are used by the credit issuers to review an account to determine if you’re eligible for a credit limit increase. If your household income has improved, you are likely to get approved. However, some credit card issuers require proof of your new income to be shown.
Now when you get your increase and more purchasing power, still be responsible for the expenses you incur. Having increased financial obligations requires greater responsibility. The less money you spend on your credit card, the higher the chances of getting an increase when you want one. Credit limit increases, like all financial decisions should be done thoughtfully.