Does increasing your credit limit hurt credit scores?

Increasing your credit limit could affect your credit scores in a few ways. But it depends on how the increase happens and how an expanded credit limit is used. 

Learn about credit limit increases and how using credit responsibly could help you build credit. 

What you’ll learn:

• If you request a credit limit increase and your card issuer uses a hard inquiry to review your credit, it could cause a dip in your credit scores.

• If an issuer proactively raises your credit limit, it may involve a soft inquiry, which doesn’t affect your credit scores.

• Capital One uses soft inquiries to review credit limit increases, so credit scores aren’t impacted. That applies whether you request the increase or Capital One offers it.

• A credit limit increase may help you lower your credit utilization ratio if you don’t increase your spending.

A credit limit increase could affect a few factors used to calculate credit scores. Here are possible ways:

Your credit card issuer could use a hard or soft credit inquiry to review your credit history:

• If the review involves a soft inquiry, it won’t affect your credit scores. These soft pulls are what issuers typically use when they proactively offer credit limit increases.

• If the review involves a hard inquiry, it could cause your credit scores to drop by a few points. Depending on your card issuer’s policies, that might be the case if you request an increase yourself.

Before you request a credit limit increase, you could check how your issuer treats credit reviews. If it uses hard inquiries and your request is denied, asking again too soon could have a bigger impact on your scores, according to the Consumer Financial Protection Bureau (CFPB).

Credit utilization is a credit-scoring factor that measures how much of your available credit you’re using. If your card issuer extends additional credit and you maintain your current spending habits, it could help lower your credit utilization ratio. The CFPB recommends keeping your ratio below 30%.

Whether to ask for an increase on a credit card—and how much to ask for—depends on your circumstances and financial goals. If you want to increase your spending power to support a major purchase or be prepared for unexpected expenses, a credit limit increase could help. 

There’s no law about how often you can request a credit limit increase. But if your card issuer uses a hard inquiry to review your request, remember that it could affect your credit scores.

Gotten a raise recently? Boosted your credit scores since you got your credit card? Those changes might reflect well on your creditworthiness and debt-to-income (DTI) ratio. And those indicators could make lenders more likely to extend additional credit.

Even if your income and credit scores are improving, issuers could be less likely to increase your credit limit if you recently opened your account, had your limit increased or missed payments.

Remember how hard inquiries can affect credit scores, too. If you have plans to apply for another loan, such as a mortgage, a hard inquiry could affect your chances of approval or the terms and rates you’re offered.

Yes, card issuers might decrease credit limits because of missed payments or inactivity.

Card issuers have their own standards about eligibility and how long accounts must be open before they’ll consider credit limit increases. But there are some general things you can do to put yourself in a better position.

• Keep your account in good standing: Making payments on time every month and not maxing out your card are responsible habits that could help you build credit. And if you’re paying off your credit card every month, you could also avoid or minimize interest payments.

• Keep your issuer up to date: If your income goes up or your DTI goes down as a result of paying down debt, that could create favorable conditions to ask for an increase. Let your card issuer know if your income or job changes. If the issuer is like Capital One, updating your personal information could “help determine eligibility for changes like automatic credit limit increases.

• Monitor your credit: You can use CreditWise from Capital One to access your credit report and credit score anytime. It’s free, and using it won’t hurt your credit scores. You can also visit AnnualCreditReport.com. Knowing where your credit stands can give you an idea of what your card issuer might review if you ask for an increase. And if you spot errors on your credit report, you can contact the credit bureaus to fix them.

Capital One credit cardholders can request a credit limit increase online. If you make a request, be sure to have certain information on hand, like your annual income, employment status, and monthly rent or mortgage payment.

Recently opened accounts generally won’t be considered for limit increases. Accounts that received limit increases or decreases in the past few months typically won’t be considered either.

For more information, check out frequently asked questions about Capital One credit limit increases.

If you received an unwanted credit limit increase on your Capital One card, call 800-CAPITAL (800-227-4825) to request a credit limit decrease. You can also call the same number to opt out of consideration for the next five years.

If you have a Capital One credit card, requesting a credit limit increase won’t hurt your credit scores. That’s because Capital One credit reviews involve soft inquiries. But that might not be the case for other credit card issuers. If a credit limit increase involves a hard inquiry, that could cause your credit scores to dip temporarily.

If you’re thinking about getting a new credit card, you could compare Capital One cards. You can even see whether you’re pre-approved. It’s quick, and it won’t hurt your credit scores.