In today’s world, everyone uses a credit card. In fact, we start using them really early on in our lives. But, as we age, our needs change and our income increases. As a result, we may look to increase our credit limit. So how do you increase the limit on your credit card? Here’s what you need to know.
Be careful and responsible!
If you’re thinking about increasing the limit on your credit card, you have to first make sure that you can afford this change and everything that comes with it. Additionally, you need to prove that you’re responsible. Start making timely bill payments for a period of at least six months and see how it works for you. You should always pay your credit card bills on time and in full. One late payment can be enough to not only affect your credit score, but to also lower your credit limit.
Most creditors won’t even consider increasing your credit limit if you can’t show them that you can pay your bills on time for at least six months. This is the standard minimum amount of time for if you want to increase the limit on your credit card.
Lower your use of credit
You can also show your credit card company that you’re responsible by lowering your credit use. Credit utilization is 30% of your credit score. The optimal rate of credit utilization is about 10%.
Be aware of what comes together with a credit limit increase
When you request a credit limit increase, your credit card company will do a hard pull on your credit score. This can cause your credit score to drop, but by no more than five or 10 points.
Finally, you need to have all the necessary documentation readily available. With this final step done, all that remains is to wait and see if you are approved.