how to ask for an increase in credit limit

Anonymous · ‎05-16-2009

Hi, I am trying to get a better debt to credit limit ratio by asking for a credit limit increase on my 3 credit cards. I gave it a shot on one of the cards and I was declined. I pay my bills on time, usually in full, and my credit reports are all good. I don't know what went wrong, I'm guessing either because:

1) I've only had the card for a few months

2) I asked for a 50% increase

3) I gave them the "wrong" answer when they asked what my household income is.

I still have 2 ccs to work with, so I was wondering what the *right* way to ask for an increase is. When they ask for househould annual income, is high better than low? If I have a limit of 8K, is 1K too much to ask for? Obviously, there can't be a tried and true answer to these questions, but if anyone has advice, I would be greatful.

techman2008 · ‎05-16-2009

drewsky6,

Right now it's a tough time to ask for a CLI. My boa credit limit was cut in half and I have high 700s fico score. I got a letter from boa saying that they gave out too much credit for my need (cough bs).

Starting Score: TU 797 EQ 798 EX 774 10/26/2008
Current Score: TU 787 EQ 784 EX ??? 09/19/2010
Goal Score: 790

Take the FICO Fitness Challenge

Watchmann · ‎05-16-2009

@Anonymous wrote:
Hi, I am trying to get a better debt to credit limit ratio by asking for a credit limit increase on my 3 credit cards. I gave it a shot on one of the cards and I was declined. I pay my bills on time, usually in full, and my credit reports are all good. I don't know what went wrong, I'm guessing either because:
1) I've only had the card for a few months
Too soon to ask for a CLI in this environment
2) I asked for a 50% increase
Too much increase to ask for for such a new account. Better to NOT ask for a CLI until credit situation improves with the banks. BIDE YOUR TIME.
3) I gave them the "wrong" answer when they asked what my household income is.
There is no 'wrong' answer here. Your household income is $X. Don't embellish it as it can come back to haunt you.
I still have 2 ccs to work with, so I was wondering what the *right* way to ask for an increase is. When they ask for househould annual income, is high better than low? If I have a limit of 8K, is 1K too much to ask for? Obviously, there can't be a tried and true answer to these questions, but if anyone has advice, I would be greatful.

Anonymous · ‎05-16-2009

Thanks watchman, that's exactly what I figured. BUT my oldest credit card is over a year old with 8K limit. I'm a college student, so it's not like I have a long credit history or large credit line. Do you think asking for a 1K increase is too much. I was just gonna ask for $500 cause I figured that was relatively low, but if there is a chance I can get more, obviously I'll want to ask for that. Sorry, I'm pretty new to this so I'm just trying to learn the ins and outs. Is this a good forum for these kinds of questions or does anyone know of a more appropriate forum for me to join Thanks in advance for advice.

Anonymous · ‎05-16-2009

Do you have any lates or bads on your report?

Do you actually need extra credit? Cause really if you are not using your current credit and your utilization is already under 9% then the extra is not going to make a huge difference and you may not want to push it and get hard pulls for limit increases just now...

Anonymous · ‎05-16-2009

@Anonymous wrote:
Thanks watchman, that's exactly what I figured. BUT my oldest credit card is over a year old with 8K limit. I'm a college student, so it's not like I have a long credit history or large credit line. Do you think asking for a 1K increase is too much. I was just gonna ask for $500 cause I figured that was relatively low, but if there is a chance I can get more, obviously I'll want to ask for that. Sorry, I'm pretty new to this so I'm just trying to learn the ins and outs. Is this a good forum for these kinds of questions or does anyone know of a more appropriate forum for me to join Thanks in advance for advice.

As a student, it may be that the creditor is correct and that $8k is an adequate CL for the length of credit history, income and other factors. What CL do you want? Arbitrary increases only come in the lower limits and with history over time. At $8k, I wouldn't expect to see large CLI's or frequent ones, unless you finish school, get higher income and establish over time your payment and low debt history.

Anonymous · ‎05-16-2009

No, not that I'm aware of. Plus I've checked all 3 credit reports and they are all good. Obviously with the last card I simply asked for too much and hadn't had the card long enough. But with this older one, there shouldn't be any lates excpet maybe very early in the game. Plus, I'm only asking for a 7% increase, so I think I'm just gonna give that a go unless anyone thinks I could possibly get more.

As I stated earlier, I'm simply trying to improve my debt to credit limit ratio, because I've heard that accounts for 30% of your credit score. I don't actually need the increase at this point though, just trying to boost my score anyway possible.

Anonymous · ‎05-16-2009

@Anonymous wrote:
No, not that I'm aware of. Plus I've checked all 3 credit reports and they are all good. Obviously with the last card I simply asked for too much and hadn't had the card long enough. But with this older one, there shouldn't be any lates excpet maybe very early in the game. Plus, I'm only asking for a 7% increase, so I think I'm just gonna give that a go unless anyone thinks I could possibly get more.

As I stated earlier, I'm simply trying to improve my debt to credit limit ratio, because I've heard that accounts for 30% of your credit score. I don't actually need the increase at this point though, just trying to boost my score anyway possible.

It's not so much how much credit you have available as the % you are using that effects most of that score (unless you have tiny amounts) Age and utilization will have more effect. Also, hard pulls can have a negative effect - esp when they don't result in anything.

You really would be better off just paying down any balances so that you are using less than 9% on one card only and all others have $0 balance and just give them time to age and have your report clear o inquiries.

You seem determined to apply for more credit tho

Anonymous · ‎05-16-2009

txjohn...

I'm just trying to increase it by an arbitrary amount, but also by as much as possible in order to get the best dtclr. I will take your advice and just ask for a small amount.

Anonymous · ‎05-16-2009

susyquk,

To tell you the truth, the reason I am so adament about increasing my credit limit is because I have been listening to this Suze Orman audiobook and she has rubbed off on me. I don't know how people around here feel about Suze Orman, but hear me out. She has a good tip for increasing your dtclr and thereby increase your FICO score. The higher your credit limit, the lower your ratio will be (assuming you don't go use it all up...which I won't). Since this ratio accounts for 30% of your FICO score, I would think this method would be a good idea so long as you don't go overboard and ask a bunch of times.

ex. debt = 4,000

credit limit = 8,000

dtclr= 50%

on the other hand...(with a 1K increase in credit limit)

debt = 4k

cl = 9k

dtclr = 44%

viola...you have a better ratio and therefore better FICO score