Do Credit Limit Increases Hurt Your Credit Score?
Get the answers to your credit limit questions
Credit limit increases can be confusing. And they can happen in more than one way. You may outgrow your available credit and need to request more. Or if you’ve used your card responsibly, your credit card company might notify you that you’ve earned a credit limit increase.
But does a credit limit increase affect your credit score? And how do you qualify for a credit limit increase in the first place? Whether you’re thinking about asking for an increase or you just got one, here’s some information to help you out.
How Can You Get a Credit Limit Increase?
If you have a credit card in good standing, there are generally two ways to get a credit limit increase.
Your credit card company may decide to automatically increase your credit limit. This decision could depend on factors like how long your account has been open and whether you’ve used your credit responsibly.
You could also request an increase yourself. If you do, you’ll likely be asked to provide information like your income, employment status, and monthly mortgage or rent payment. Your credit card company may weigh these along with other factors to decide whether to approve your request.
Does Requesting a Credit Limit Increase Affect Your Credit Score?
The answer usually depends on whether your lender pulls a copy of your credit report in order to evaluate your request.
Generally, your lender will review your credit history and take into consideration how much additional credit you’ve asked for. As part of that process, the lender may obtain a copy of your credit report. This is known as a hard inquiry. A hard inquiry could affect your credit score, since credit score models consider how recently and how frequently you’ve applied for credit.
If you have a Capital One credit card, requesting a credit limit increase will not result in a hard inquiry.
You might want to consider asking your issuer about their procedure before requesting a credit limit increase.
How Does Getting a Credit Limit Increase Affect Your Credit Score?
As long as you don’t increase your spending by too much and keep making payments on time, your credit score shouldn’t be negatively affected by a credit limit increase. And that’s because a higher credit limit can lower your overall credit utilization ratio.
Credit utilization—how much of your available credit you’re using—is an important factor in determining your credit score. The Consumer Financial Protection Bureau recommends you keep your ratio under 30%. This, along with responsible behaviors like on-time payments, could actually help improve your credit score in the long run.
How Can You Become Eligible for a Credit Limit Increase?
Here are some things that can help your chances of qualifying for a higher credit limit:
- Keep your financial and personal information up to date. Credit card companies will need your most current information to consider you for a credit limit increase.
- Pay your monthly statements on time. This is an important way to build and improve your credit history.
- Pay more than the minimum on your credit card bills. This shows responsible use and can also help you save money on interest charges.
- Review your credit report. It’s a good idea to make sure your information is up to date—and that there aren’t any errors. You can get a free online copy of your credit report from each of the three major credit reporting agencies weekly through April 2021.
- Monitor your credit. You can also monitor your credit with CreditWise from Capital One. CreditWise is free for everyone and alerts you when something meaningful changes on your TransUnion® credit report. You can access your report and weekly VantageScore® 3.0 credit score anytime, without negatively impacting your score.
What Should You Do If You Get a Credit Limit Increase You Don’t Want?
If you receive a credit limit increase you’d rather not have on your Capital One card, just call 1-800-CAPITAL (1-800-227-4825). Capital One will reset your credit limit to its previous amount. Don’t want to be considered for a credit limit increase? Call the same number to opt out of consideration for the next five years.
How exactly you decline an increase varies among credit card companies. So you’ll want to contact your issuer to discuss your options and learn more about the possible impact to your credit score.
Can Your Credit Limit Be Reduced?
Your credit card company can also decrease your credit limit. Some of the reasons could include a number of missed or late payments, or not using the card much—or at all—for a certain amount of time. Keep in mind, if your credit limit is reduced, that means your credit utilization ratio could go up, which could cause your credit score to dip.
If you want to learn more, check out these frequently asked questions about credit limit increases.
Government and private relief efforts vary by location and may have changed since this article was published. Consult a financial adviser or the relevant government agencies and private lenders for the most current information.
We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.