How to Earn a Credit Limit Increase

How to get a credit limit increase without asking

  • Always pay your bill on time
  • Try to pay your bill in full if possible
  • Use only a portion of your credit limit
  • Update your income with the credit card company
  • Keep your credit card account open for a minimum of six months
  • Pay down the debt you owe
Don't be spooked by less than perfect credit. See card offers.

This guide and its editorial content explains how to apply for a credit limit increase, provides tips for getting that increase and offers insight on ways to raise your credit score.

Getting a credit limit increase is amazing. It’s the kind of experience that feels like getting a promotion at work or better yet, a raise. 

An increase to your available credit is a watershed moment in your credit history, more so if you’re rebuilding a bad credit score or brand new to having a credit card. 

An increase to your credit limit is both a warm-fuzzy feeling and a key indicator that you are responsible with your credit spending.

A bigger credit limit vastly improves your purchasing power. But that’s just one of the advantages obtained when you increase your limit. A higher limit can have a positive impact on your credit score, as well — as long as you maintain a healthy credit utilization rate

Something important to know about your credit card is that thirty percent of your credit score from the three major credit bureaus gets calculated based on your level of debt. 

What that means is your credit utilization, or the amount of available credit you’re using, is one of the biggest parts of your credit score. And a credit limit increase will instantly lower your credit utilization ratio because of how it affects the math.

how to earn a credit limit increase

That means if you raise your credit limit and keep your debt the same or pay some of it down, you automatically get a higher credit score.

Getting an Automatic Credit Limit Increase

Some credit card issuers make it easy and automatically raise your credit limit. They do automatic increases when you hit benchmarks that tell them you handle credit responsibly. 

Those benchmarks include maintaining a manageable credit utilization rate and consistently making your monthly payments.

A lot of credit card issuers review their customers’ accounts periodically and will automatically raise the credit limit for some of their cardholders.

Their goal is to help you build credit and help you qualify for better options. The stronger your credit, the better it is for both the credit card issuer and for you, the customer. 

So, in some cases the best time to ask for a credit card increase is never. Instead, wait for it to go up automatically with a credit line increase — whether its your Reflex Mastercard® or your Hilton Honors American Express.

ask the credit issuer directly for a credit limit increase

Ask the Credit Card Issuer Directly

Some credit card issuers will only raise your credit limit if you ask. There are usually two ways to initiate the inquiry process: 

Call Your Credit Card Issuer

The easiest and most direct way to start the inquiry process, is to call the toll-free number your credit card issuer provides. Once you call, listen to the system prompts. 

Usually there’s instructions provided for requesting a credit limit increase. If no prompt is available, wait for the chance to speak to a live customer service representative. Once you’ve got a human, ask them about increasing your credit limit.

Do it Online

These days, a lot of credit card issuers let you request a credit limit increase online. To do it that way, log in to your account and look for the button or menu option related to credit limit increases.

Be prepared to provide additional information including monthly income, the amount of credit limit increase you want, and the reason you want the increase.

does the request for a credit limit increase hurt your score?

Does Requesting a Credit Limit Increase Hurt Score?

Yes, in some instances requesting a credit limit increase can hurt your credit score.

Just like when you apply for a credit card, the act of asking for an increase to your credit lines will initiate a look into your credit history.

Depending on the type of inquiry, this can affect your credit score.

There are two kinds of credit pulls, but your credit score is only affected by one of them.

This happens during a hard pull on your credit report. Depending on the card issuer, a limit increase request will sometimes trigger a hard pull on your credit report. This hard pull can hurt your credit, especially if you have a short credit history.

If you call your credit card issuer, you can ask whether a hard inquiry will be initiated. 

Difference Between a Soft Inquiry and a Hard Inquiry

It’s important to note that when you request an increase in your credit limit, a soft inquiry will not affect your credit score.

  • A soft pull is an inquiry that appears only on the version of your credit report you can see. 
  • A hard pull is a different story entirely. A hard inquiry will affect your score depending on the specific information in your credit report.

Hard pull can appear on all versions of your credit report for up to two years.

That means if you have a lot of debt in your payment history from other sources like student loans or home mortgages, you should consider waiting to ask for a credit limit increase.

Try to pay off your debts and get yourself in a better position overall.

Remember you can always check your credit history to see what kind of pull the credit card issuer does. So don’t hesitate to ask your credit card issuer what whether they’ll do a soft or hard credit check beforehand.

increase your security deposit

Extra Tip: Increase Your Security Deposit

Some credit cards are called secured. A secured credit card requires a cash security deposit and this in turn reduces the risk to the issuer. 

So one sure-fire way to increase your limit, if you have a secured credit limit, is to pay more towards your security deposit. To do so, the best bet is to contact customer service and have them provide the proper steps to do this. Each credit card issuer has a slightly different process.

how soon is the decision on a credit limit increase request made?

How Soon is a Credit Limit Increase Decision Made?

If your credit card account is in good standing and you can demonstrate that you have enough income to handle a higher credit limit, many times you’ll find out immediately if your request was approved. Sometimes, though, the process takes a bit longer and your credit card issuer will sometimes notify you a few days later via mail.

what to do when you get denied a credit limit increase

What to do When a Credit Limit Increase Gets Denied

A credit limit increase can be denied by a credit card issuer for a variety of reasons including: 

  • The credit card account may be too new
  • It may be too soon since a previous credit limit adjustment
  • You may not have enough income  to qualify for an increase
  • Or, you might simply have an account that doesn’t receive any total credit limit increases

Beyond those common reasons, negative marks on a person’s credit history are often the reason a credit limit increase gets denied. 

If that is the case, you will receive an adverse action letter. This letter is required to explain in detail the factors that caused the adverse action. Common factors include missed payments or high balances. You’ll also get a free credit score report if your score was used in the decision to decline your request.

If your request was denied:

  • Pay attention to the reason(s) given in the letter
  • Take actions to improve your credit in those areas
  • Continue to make payments, even if only minimum payments, on time 
  • Wait a few months, and then try again
Give your credit a surge with the Surge Mastercard!

People Also Read

Continental Finance is one of America’s leading marketers and servicers of credit cards for people with less-than-perfect credit. Learn more by visiting ContinentalFinance.net

Pre-Qualified vs. Pre-Approved Credit Cards

You just opened up your mail. And in that you received two different credit card offers. 

One says: You’re Pre-Approved!

The other says: You’re Pre-Qualified!

You scratch your head. What’s the difference between the two?

Don't be spooked by less than perfect credit. See card offers.

At a quick glance, both mean almost the same thing, and both are very good. But one distinction carries a bit more weight than the other.

In this article we will cover:

  • What does pre approved credit mean
  • What does prequalify for credit mean
  • The difference between prequalified and preapproved
  • Does prequalification affect your credit score

So what does pre approved credit mean?

Pre approved vs. pre qualified credit cards is a confusing question that comes up often for people who are interested in getting a new credit card. 

At its core, these terms have to do with the fact that lines of credit are essentially loans. And that means there is a small difference between loan preapproval and prequalification. 

Neither guarantees loan approval, but if someone says a person is pre-approved or that they are pre-qualified, then a key first step in the process of obtaining a loan. This holds true whether your in the middle of the mortgage process applying for a home loan or you are filling out an online form to apply for a credit card.

Pre-Qualified Credit Cards

The first thing to know is that whether it’s a pre-approved credit card offer or a pre-qualified credit card offer, a person is not guaranteed to receive the credit card. The big difference in the terminology has to do with the process of how the credit card issuer makes their decision.

Qualifying for a loan has many checks along the way and requires due diligence by credit card companies and credit bureaus. These checks of an applicant’s information is to alleviate risk.

 But credit cards are a very competitive market so being able to give a potential customer some assurances that they are the type of candidate the credit card issuer is looking for goes a long way toward getting more people approved.

So what a company typically means when they say a person is “pre-qualified” for an offer is that the person has characteristics that the credit card company knows fit what they are looking for. The most common characteristic used to judge a pre-qualified offer is a person’s credit score.

This is one of the top reasons why having a good credit score is important.Each month a thee major credit bureau (the three major credit bureaus are Experian, Equifax and Transunion) receives information about peoples’ financial activity. 

This credit reporting adjusts a person’s score regularly. The better a person’s score, the easier it is for them to qualify for loans, and consequently, more credit.

A pre-qualified credit card offer means at the time of the offer a person’s credit score falls in a particular range, or has some other characteristic such as “no delinquent payments in the past 12 months.” Because that person’s credit history matches that characteristic they are one step closer to being approved and that puts the person on a list of people who are now pre-qualified to receive the offer.

But the caveat here is that there is zero guarantee that when the same person who pre-qualified for the offer gets around to filling out an application for the credit card offer, they will pass the approval process. Which leads us to …

Pre-Approved Credit Cards

To define a pre approved credit card offer is simple. Pre-approved offers are most often just one more step further in the application process. And that’s it. 

A person who receives a pre-approved credit card offer has been targeted for that offer because the credit issuer has taken a closer look at the person’s financial characteristics. 

One of the most common ways to do this is through a soft inquiry, or soft pull of a person’s credit history. In our previous article, a guide on how to earn a credit limit increase, we described what a soft pull is:

“A soft inquiry will not affect your credit score. A soft pull is an inquiry that appears only on the version of your credit report you can see.”

Greg Knotts, Continental Finance Company

Because the credit card company has more information available when they make a pre-approved offer, there is a stronger chance a person will be approved for the credit card when they complete the application.

But it’s still not a guarantee. The pre-approved credit offer means a person’s information fit the characteristics the credit card company was looking for at the time they collected the data. But because it takes time for offers to be mailed and/or e-mailed to prospective customers, and then more time for those prospective customers to respond, characteristics can still change. 

It could be weeks or even months before a person replies to an offer. And credit history can change radically in that short amount of time. Significant changes to an applicant’s credit situation can lead to altering the terms the person is offered or disqualifying the person from any offers.

Why is the difference between preapproval and prequalification important?

For all practical intents and purposes, the difference between a pre-approved offer and a pre-qualified offer is minimal. It likely will have zero impact on terms that matter, such as the loan amount or the interest rate of the offer. 

The only distinction is a pre-approved offer is made with slightly more information on hand, and so a person’s financial characteristics fit the offer a little bit better. Which means that a pre-approved offer is one tiny step closer to approval.

Should you choose a preapproved or prequalified credit card?

This is mostly up to the individual and the timing of the offer. If a person is seeking a new credit card or a credit card with better terms than their current lines of credit, then a pre-approved or pre-qualified credit card offer could be the perfect solution.

But the offer isn’t guaranteed. And there are many other ways to find a new line of credit. 

Will prequalification affect your credit score?

A pre qualification credit check does not typically affect a person’s credit score. As explained above, there’s no hard inquiry made on a person’s credit history. Pre-qualified offers usually target just a range of scores or some other characteristic that does not require detailed analysis of a person’s credit information.

Continental Finance Company, for example, runs a pre-qualified offer online. It’s a very simple process that will not affect a person’s credit score at all:

  • Step One: Go to the offer page.
  • Step Two: Fill out the pre-qualification form to check on the offer you are made.
  • Step Three: A soft inquiry is made to find the offer that best fits your characteristics

After that, an offer is made. When a person accepts that offer, that’s when a person’s credit score is affected. This is part of the final stage of the application. And a hard inquiry is made to finish the application.

Give your credit a surge with the Surge Mastercard!

People Also Read

Continental Finance is one of America’s leading marketers and servicers of credit cards for people with less-than-perfect credit. Learn more by visiting ContinentalFinance.net