How to increase CC limit?

[MBOhio2]

Ok, so I recognize that this sounds like a dumb question, but I'm trying to understand how to approach this. I have 3 major credit cards that I've had between 4-10 years. All of them have a good payment history, but they have been nearly maxed out since I first got them (racked it up in college, 6 years later I haven't yet paid them down - working on it now though!) As a result, the limits on them are all small, between $1000 and $2500. They are all still at the original limits that were given to me and none of the CCC have offered to raise my balance nor have I ever asked. I assume the CCC have never increased them because they've been maxed out.

So here's the question... what does a lender look at when a request to increase a limit is made? I am assuming they look at 1) individual card history (payment history, balance history, etc) and 2) overall credit history/score...  but what else?

One of the things I think is hurting my score (and overall financial health) is that my credit cards have low limits. Therefore, one of the things I would like to do over the next 12-24 months (in addition to paying the cards off) is get the balances increased.

Advice please!!

[Anonymous]

The main thing that is hurting your score is your utilization. Get 2 of your cards down to $0 and 1 down to 1-9%... probably more on the 1% side, and in 6 months your credit card companies will probably be giving you big automatic increases. Assuming you don't have any derogs.  If you don't get increases automatically give them a call and politely request a review of you CL and  CLI, you'll almost certainly get one, and your scores will go up significantly before that even happens. Just get your credit card debt down. Stop paying silly interest rates.

One thing that might happen, because your accounts have been so close to the CL for so long, is that as you pay these down they might lower your credit limit. Don't be discouraged by this. They are probably nervous with you having as much credit as you do when you seem to be living so close to the edge. You need to get away from the edge for a while to show that you are not a credit risk, and then your CLIs will go back up and then some. Provided there isn't anything else on your CR holding you back.

[MBOhio2]

I should add some more infomation here.... none of my credit cards have any lates or any negative information except for high utilization. HOWEVER, I do have issues with a bunch of charged-off student loans. Those CO SLs are actually the only negative thing on my credit report at all, but as you can imagine, they are dragging down my score big time.

I guess my question is, if you have good history with a particular card (or all credit cards) but your credit score is struggling for other reasons, how will a CCC company look at you for purposes of a limit increase. Once I pay off these credit cards and do as you advise above ($0 on 2 accounts, 1% on the other) and I've had it that way for awhile.... will CCC be willing to increase my limit considering I have these SL charge-offs and a lower credit score?

Again, just trying to understand what goes into the CCC decision to increase.

Anyone have personal experience with CC limit increases that they can share, including what their history looked like with the CCs and their overall credit score at the time of increase??

[mauve]

The effect of paying off those credit cards will have an almost-immediate (next statement, approximately) effect on your credit scores.

The CC boards will have more info about the CCC's reactions to paying down balances - it varies card to card.

The only way in which low limits (and really, those aren't really low, they're just lower than some - tell someone with a $300 limit that $1-2.5k is low) affect you negatively is that a lower $ balance translates into a higher utilization % than it would on a higher limit card.

[MBOhio2]

Thanks for the info mauve... I will transfer my questions over to the CC board. I think of everything I do as "rebuilding my credit" but I realize there are other specialty boards too!