Your
credit limit is the maximum amount a lender lets you borrow on a credit card or other
revolving credit account. The size of your credit limit doesn’t just determine how much money you have to spend — it plays a big role in your credit health.
So how exactly does increasing your credit limit affect your credit score? Let’s break down how a higher limit can help or hurt you.
Will asking for a higher credit limit hurt your credit score?
The answer to this question depends on how your credit card issuer handles the request. When you ask for a credit limit increase, the lender will typically run a credit inquiry to determine if you qualify. It could be either a hard credit inquiry or a soft one — and that’s the difference that matters.
Soft credit inquiry
Some lenders perform a soft pull, which is a credit check that doesn’t affect your score. Soft inquiries happen when you check your own credit or when lenders pre-approve you for things like mortgages and special offers. If your credit card issuer uses a soft inquiry to evaluate your limit increase request, your credit score should remain unchanged.
Hard credit inquiry
Other lenders use a hard pull, which is a more in-depth credit check. Hard credit inquiries can temporarily lower your credit score by a few points because they indicate that you’re seeking new credit. A hard pull is the same type of inquiry that happens when you apply for most new loans or credit cards.
The advantages and disadvantages of increasing your credit limit
A higher credit limit can be a powerful tool for managing your finances — but only if you use it wisely. Here’s a look at the pros and cons of increasing your credit limit.
Advantages of a credit limit increase
Disadvantages of a credit limit increase
Temptation to overspend. If having more available credit makes you feel like you can spend more, you could rack up debt faster — especially if you don’t pay off your balance in full each month.
Potential hard inquiry on your credit report. If your lender does a hard credit check, your score might dip for a little while. It will recover, but that hard pull could be an issue if you’re planning to apply for a mortgage or other major loan in the near future.
Higher risk of debt. A higher limit doesn’t mean free money. If your spending increases but your income stays the same, you could put yourself on the path to long-term financial strain.
Should you increase your credit limit?
Boosting your available credit isn’t always the right move, but there are certain situations where it could work in your favor. Here’s when to ask for an increase in your credit limit.
If your income has increased, lenders are more likely to approve a higher credit limit because you have more funds available to pay off the balance. Plus, with a bigger income, you’re in a better position to manage any additional spending responsibly.
Before a major purchase
Planning to finance a big-ticket item like furniture or travel? A higher credit limit can give you more spending power while keeping your credit utilization low. Just be sure you can afford to pay off the balance so all that extra credit doesn’t turn into extra debt.
To prepare for emergencies
Life is unpredictable, and having a higher credit limit can act as a safety net for unexpected expenses like medical bills or car repairs. Even if you don’t need it now, it’s better to have access to extra available credit before an emergency strikes.
When your credit score has gone up
If you’ve been working hard to make on-time payments, lowering your debt, and managing
your credit score, you’re more likely to qualify for a credit limit increase. A good credit history signals to lenders that you handle credit cards responsibly.
How to become eligible for a credit limit increase
Asking for a credit limit increase doesn’t mean you’ll get one, but following these steps could may help increase your chances of approval.
Pay your bills on time
Payment history is the
biggest factor in your credit score, and lenders want to see a track record of on-time payments before granting a higher limit. Set up autopay or payment reminders to avoid missed due dates.
Reduce your credit utilization ratio
We’ve mentioned the credit utilization ratio a few times because it’s a really important factor, since lenders like borrowers who aren’t constantly maxing out their credit cards. Try to keep your credit utilization rate below 30%. If you’re not quite there yet, work on paying down your balances before requesting an increase to show you can manage credit wisely.
Update your income with your lender
If you’ve gotten a raise, started a higher-paying job, or added another source of income, let your credit card issuer know. (You can usually do this right from their app.) A higher income makes you look less risky to lenders and may increase your chances of approval.
Wait a while before requesting again
Wondering how often you should request a credit limit increase? If you’ve recently applied for a credit increase, give it 6–12 months before trying again. If you got approved, the same timeline usually applies — asking too soon could make you seem overly reliant on credit cards, which could raise concerns for lenders.
If your request gets denied, work on improving your credit score and reducing debt before trying again. You can keep an eye on your score with
EarnIn’s Credit Monitoring tool, which lets you check your credit score any time — no inquiries required. You’ll know when your score has changed and you can decide when to apply again.
How much of a credit limit increase should you ask for?
A good rule of thumb is to request a 10–30% increase — big enough to help manage your credit utilization rate but not so high that it raises red flags with lenders. Asking for too much (like doubling your limit) could result in a denial, especially if your income hasn’t increased.
If you’ve had your account for a while and have a strong payment history, you might qualify for a larger bump. Before making a request, check with your issuer to see if they have specific guidelines on reasonable limit increases.
How to request a higher credit limit
Requesting a credit line increase can be beneficial, but you’ll want to do it strategically to avoid hurting your credit score. Here’s how to safely ask for more available credit:
Ask if a soft inquiry is possible. Before requesting an increase, ask your issuer if they can do a soft pull instead of a hard credit inquiry to avoid unnecessary dips in your score.
Boost your creditworthiness first. Lenders want to see a strong credit history. Make sure you’re paying bills on time, keeping balances low, and maintaining good overall credit habits before applying.
Update your income and employment information. If you’ve recently gotten a raise, a new job, or an additional income source, report it to your credit card issuer before making the request.
Check your credit report for errors. Mistakes on your credit report can lower your score and affect your approval odds. You’re allowed to request one free report from the three major credit bureaus each year. Take advantage of this to make sure reports are accurate.
What to know about automatic credit limit increases
Sometimes, you don’t even have to ask for a credit limit increase. As you
build credit, your lender might offer one automatically. Credit card issuers periodically review accounts to determine if a cardholder qualifies for more credit.
Factors that may trigger an automatic increase include consistent on-time payments, a low credit utilization rate, and a
rising credit score. If you regularly pay off your balance and show responsible credit usage, lenders may raise your limit as a reward.
Some issuers also periodically review income updates or credit reports to see if the cardholder qualifies for an increase. If an automatic boost appeals to you, be sure to update your income info with the lender when you get a raise.
Monitor your credit health with EarnIn
Asking for a credit limit increase has the potential to lower your credit utilization rate. But it’s important to know where you stand before making the request — and important to keep monitoring your credit no matter how the lender responds.
EarnIn’s free
Credit Monitoring tool lets you keep a close eye on your credit score any time without adding an inquiry to your report. It’s a great way to stay on top of changes so you can make sure you track your credit score
Download EarnIn today to take control of your financial health.
Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.
EarnIn is a financial technology company, not a bank. Banking services are provided by our bank partners on certain products other than Cash Out. Calculated on the VantageScore® 3.0 model. Your VantageScore 3.0 from Experian® indicates your credit risk level and is not used by all lenders, so don’t be surprised if your lender uses a score that’s different from your VantageScore 3.0.
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