Have you ever wanted a
credit line increase
on your credit card? If you are a card holder, you probably have had
the desire to increase your line so you could make higher purchases. Or
maybe you have wanted to increase it so you could improve your credit
score so you can later get a better interest rate on a loan.
It was interesting for me to learn that the
closer you are to your maximum limit on a credit card, the higher risk
you are to lenders. To them, it appears that you are struggling
financially to keep your balances down.
It can also affect you credit
score because of your income-to-debt ratio. So, if you have a card with
a $10,000 limit and you owe $2,000, your credit will be in much better
shape than if you owe the same $2,000 on a $5,000 limit.
When you are trying to get a credit line
increase, the most important thing for you to do is demonstrate credit
worthiness. When you are a responsible borrower, you are telling banks
and other lenders that you can be trusted with their money until you
pay it back. This is the first thing that lenders look at when
determining if you qualify for a loan.
If you can prove your credit worthiness, it
is most likely that your bank or credit card company will give you a
credit line increase. It is important that you realize this strategy
could only apply to banks and credit card companies.
Even though you
may have better purchasing power with a higher credit limit, you may
have additional fees and a higher interest. Sometimes the APR will
change as well.
Another way to get credit line increase is
to use your credit card. Don’t just have it laying around for
emergencies. Yes, by not using your card, you are trying to get out of
debt, but if you are making small purchases that you can pay off at the
end of the month, your credit score will increase. If you are proving
that you can pay money back, your chances of getting an increase will
be higher.
When you do make payments, try to pay more
than just the minimum amount. If possible, try to pay the amount off
entirely. This demonstrates that you are aiming for better credit and
in many ways that you deserve a higher line of credit.
If you follow these suggested tips, you will
soon be able to get a credit line increase. Once you do have your
credit line increase, protect it.