When it comes to credit cards, it can be overwhelming to keep track of everything from your balance to your credit score. But what does it mean if your credit card company says they upped your credit limit? Whether you’re thinking about asking for an increase, or you just got one, we can help answer some questions you may have, including how a credit limit increase can affect your credit score.
Q: Why did I get a higher limit?
A: Using your card responsibly—paying on time, paying more than the minimum, etc.—can help you become eligible for a credit limit increase. Your lender may increase your limit if they notice you’ve been on your best credit card behavior.
Q: How does an increase affect my credit score?
A: It depends on what you do with your new limit. The amount of your total credit that you’ve used, known as your credit utilization rate, makes up around 20%-30% of your credit score. Most of the time, using less than 30% of your available credit is a good goal. So, when your credit limit goes up, the percent of credit used goes down. As long as you don’t increase your spending too much and keep making payments on time, your new higher limit shouldn’t harm your credit score.
Q: How do I stay on top of my new credit?
A: There are a number of tools you can use to keep track of your credit, including customized balance alerts and payment reminders. The card lock feature on the Capital One WalletSM app can also help you control unwanted spending by your authorized users. And even if you use another issuer, you can use our CreditWise® tool to check your credit score for free and learn about the factors that can influence it.*
Q: What should I do if I get an increase I don’t want?
A: This varies among credit card companies, so check with your issuer to find out how they deal with lowering limits. If you’ve been given a credit limit increase on your Capital One card and you’d rather not have the higher limit, it’s not a problem. Contact us and we’ll reset it back to where it was originally.
Q: How can I become eligible for an increase?
A: For starters, those good behaviors we mentioned above can boost your overall credit standing and make you more likely to get an increase. We also recommend keeping your income information updated in your account profile if you’d like to be considered for future credit line increases.
Q: How does requesting an increase affect my credit score?
A: When you request a credit line increase, the card issuer may need more information from the credit reporting agencies to process your request. Sometimes, this is a “soft inquiry,” which won’t impact your credit score. However, if a “hard inquiry” is needed, your score may be impacted. Check with your issuer on their policy.
Increasing your credit card limit can be a tricky thing to figure out. But with this information, you can feel prepared to understand what a higher credit limit might mean for you, or to get your credit in good standing to request an increase.