Does asking for a credit line increase hurt your score

Let’s Learn About: How a Credit Limit Increase May Affect Your Credit Score

Increasing your credit limit may help your credit score if you keep your credit utilization low
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If your lender does a hard inquiry to approve your credit score increase, your score may go down
An increase in income can make you eligible for a credit limit increase

Your credit limit is the maximum balance you can have on your credit card. Increasing your credit limit could help your credit score, leave it unchanged, or lower your score, depending on the circumstances.

Find out what factors could cause you to hurt your credit score, and when it’s the right time to ask for a credit limit increase.

How can increasing your credit limit affect your credit score?

All things being equal, increasing your credit limit will reduce your credit utilization ratio. The credit utilization ratio is the amount you owe as a percentage of your credit limit. A low credit utilization ratio may help your credit score more than a high ratio.

If you increase your credit limit, your spending habits remain about the same, and you continue to make on-time monthly payments, your utilization ratio would go down, and this could impact your credit score.

However, if you increase your spending too much after increasing your credit limit, your credit utilization ratio will increase, and that may negatively impact your credit score.

For example, if you have a $1,000 credit limit and spend $500 before you pay the bill, that’s a 50 percent credit utilization ratio. But if you get a credit limit increase to $2,000 and then spend $1,500 before you pay the bill, your credit utilization ratio will go up to 75 percent.

The Consumer Financial Protection Bureau recommends keeping your credit utilization ratio under 30 percent.

Your credit score may also be affected by a credit limit increase because of a hard inquiry. When a lender obtains a copy of your credit report to decide whether to grant your request for additional credit, this results in a hard inquiry on your credit report. Hard inquiries usually do not have a significant impact on your credit score unless many occur in a short period of time.

When to ask for a credit limit increase

Asking for a credit limit increase at the right time could affect your chances of being approved. Consider these things before requesting a credit limit increase.

You Received a Raise: Reporting an income increase could show credit card issuers you have the ability to handle more debt.
You Make On-Time Payments: Credit card issuers take into account how reliably you make payments on all of your loans.
You Have a Low Credit Utilization Ratio: Using only a small percentage of your available credit shows that you can handle credit responsibly.
Your Credit Score Is Good to Excellent: Credit card issuers are more likely to issue additional credit if you have handled your existing credit well.

You can request a credit limit increase on your Discover Card by logging into the Discover Account Center, selecting “Card Services” and then “Credit Line Increase.” Or on your Discover Mobile App, select “Services” and then “Credit Line Increase.”

You can also request a credit line increase by calling the phone number on the back of your Discover card.

What you should consider before requesting a credit limit increase

You Applied for a New Line of Credit: Applying for a new line of credit and requesting a credit limit increase can both result in a hard inquiry. Multiple hard inquiries may negatively impact your credit score and potentially show financial hardship.
Your Income Has Decreased: If you recently transitioned to a lower-paying job, it could affect being approved for a credit limit increase.
Your Credit Isn’t Good: If your credit isn’t good, it may be best to work on improving your credit score before requesting a credit limit increase.

Automatic credit limit increases

Requesting a credit limit increase isn’t the only way to get one. If you have used your credit card responsibly and have made on-time payments, your credit card issuer may automatically increase your credit limit.

Getting declined for a credit limit increase might impact your credit scores. Whether it does depends on if the card issuer reviews your credit report with a hard or soft inquiry before making their decision. If it's a soft inquiry, your credit scores won't be affected at all. However, similar to when you apply for a new credit account, a hard inquiry might hurt your scores.

How Asking for a Credit Limit Increase Works

The process for requesting a credit limit increase can vary depending on the credit card issuer, but it's not something that's typically difficult to do. Some companies let you make a request online, while others ask you to call a representative. You can often ask to raise your credit limit by a specific amount.

Credit card issuers aren't always clear about whether the request will result in a hard or soft inquiry, but some share this information online. For example, Barclays says a request for an increase could lead to a credit inquiry that "may have an impact on your credit score" (in other words, a hard inquiry). Capital One's website says the issuer only performs a soft inquiry that won't impact your credit score.

If you're unsure and can't find the information online, call your card issuer and ask whether it will use a soft or hard inquiry. You can also ask if it's likely that your request will be approved. However, they likely won't be able to guarantee a result before you make the request.

While a single hard inquiry can stay on your credit report for two years, the impact on your scores will be temporary and should not be a significant factor when you responsibly seek credit. Multiple inquiries in a short time period, on the other hand, can be a cause for concern when it comes to credit cards.

How Does Your Credit Utilization Impact Your Credit Score?

Your credit utilization rate is a comparison of your balances and credit limits on revolving accounts such as credit cards. Your utilization rate may increase if you close a credit card or the issuer lowers your credit limit and your balance stays the same. Conversely, increasing your credit limit could lower your utilization rate.

Your utilization rate is an important scoring factor, and using a small portion of your available credit is best for your credit scores—which is why a credit limit increase might help you improve your scores. Lowering your utilization rate is also one of the few things you can do that may quickly improve your credit scores.

For example, if you have four credit cards with a combined credit limit of $20,000 and a combined balance of $5,000, your utilization rate is 25%. However, if your total credit limit is increased to $30,000, your utilization rate drops to about 17%. Your card issuers may report the changes around the end of your cards' next billing cycles, and your credit scores could then reflect the lower utilization rate.

All that said, increasing your credit limits won't necessarily help your credit scores if you wind up increasing your card balances as well. If a higher limit might lead you to spend more, requesting a credit limit increase might not be a good idea.

Reasons Why Your Credit Limit Increase May Have Been Denied

When you request a credit limit increase, the card issuer may review your credit reports, credit scores, how you use credit cards, your history with the company, and the income information it has on file. (If your income has increased, you may want to update your information before requesting a credit limit increase.)

Credit card companies might deny your request or offer a smaller increase than you wanted for various reasons, including:

The credit card account is only a few months old
You requested and received a credit line increase in the past few months
You have a low credit score
Your income isn't high enough
You don't use the card often
You rarely pay more than your minimum monthly payment
You've missed a payment or are currently past due on this or another credit account

When you're denied a credit limit increase due, at least in part, to your credit information, you might be sent an adverse action letter. If the lender used your Experian credit report in their decision-making, receipt of an adverse action letter means you have the right to request a free copy of your report, which you can do on the Experian's Report Access page. If a report from one of the other major consumer credit bureaus (TransUnion or Equifax) was used, you can request a copy of your report from those companies as well.

The letter will also explain why the card issuer denied your request. Addressing any issues included in that explanation may increase your chances of getting approved later, although it's no guarantee.

You can also call the card issuer and ask about your other options. For example, if you have multiple credit cards from the same issuer, you could be declined because your combined credit limit is too high. Rather than getting an increase, you may be able to move available credit from one card to another.

Check Your Credit Score for Free

While card issuers consider various information when you request a credit line increase, your credit scores could be an important factor. Monitoring your scores—along with your card usage and reporting income increases—could help you determine when it's a good time to make the request. You can check your FICO® Score☉ from Experian for free and get personalized suggestions on how to improve your score.

Is it better to request a credit line increase?

Although a credit limit increase is generally good for your credit, requesting one could temporarily ding your score. That's because credit card issuers will sometimes perform a hard pull on your credit to verify you meet their standards for the higher limit.

Does getting a credit limit increase affect your score?

Requesting a credit limit increase will likely trigger a hard inquiry and cause a short-term decrease in your credit score. Receiving an automatic credit limit increase (i.e. your issuer increases your credit limit without you asking) will not hurt your score.