Does Requesting a Credit Limit Increase Hurt Your Credit Score?

Whether requesting a credit limit increase affects your credit depends on the type of credit inquiry a lender performs to review your credit history. A soft credit check won’t impact your credit. But a hard credit check could temporarily ding your credit score.

Some banks only perform a soft check when you request a higher credit limit, while others will do a hard credit check. Before you request one, ask your lender which type of inquiry it’ll perform so you can understand how it could impact your credit score.¹

In some scenarios, asking your credit card issuer to raise your credit limit could make sense. For instance, you may request a credit limit increase if:

• You want to make a large purchase. If you plan on making a large, one-time purchase, increasing your credit limit might help you spread your payments out over time without maxing out your credit card.
• Your income has increased. Asking for a higher limit can also make sense if your income has increased since applying for a card. Just review your finances first to ensure you can handle larger monthly payments if you increase your card usage.
• Your credit score has increased. If your credit score has improved since taking out the card, it could be an ideal time to ask your issuer to raise your limit. That’s because that’s one crucial factor lenders consider when reviewing your request.¹

Although there are situations where asking for a higher credit limit is a smart move, it’s probably better to wait if:

• You applied for a new line of credit not long ago. It might be wise to wait before requesting a limit increase if you’ve recently opened a new credit account. Making multiple credit requests in a short timeframe can signal to a lender that you might be stretched too thin financially.
• Your income has decreased. If your income has dropped since getting a card, asking for more credit might not make sense because a credit card issuer might think you can’t afford a higher limit.
• You don’t have a good credit score. You may want to hold off on requesting a higher limit if your credit score has taken a significant hit. The lower your score, the less likely you’ll get approved for more credit.

In addition to requesting an increase, some credit card companies may automatically increase your credit limit, meaning you don’t have to ask them to. Your card issuer may offer an automatic credit limit increase after reviewing your account and seeing that you’ve paid your bill on time, kept your balance low, or improved your credit score.¹

Unlike requesting a credit limit increase, an automatic increase usually doesn’t harm your credit. That’s because when credit card companies review your account, they generally only perform a soft credit check.²

If you want to avoid overspending on a credit card, you can ask for a credit limit reduction instead of an increase. To request one, contact your card issuer and ask to lower your credit card limit.

However, reducing your credit limit comes with drawbacks. For example, it can increase your credit utilization ratio, which could harm your credit score. Your credit utilization ratio is the amount of available credit you’re using compared to your credit limit.

Another possible downside of reducing your credit limit is that a higher credit utilization ratio could signal to lenders that you’re financially overextended. As a result, they might be less willing to approve your loan application.

If you plan on asking your credit card company to raise your credit limit, here are some steps that can improve your chances:

• Make on-time payments: Your payment history is one of the most significant credit scoring factors. Paying your bills on time shows lenders that you’re a responsible borrower, and it can improve your credit score. On the other hand, not paying your credit card bill on time can cause major damage to your credit.
• Pay at least the minimum amount every month: Even if you can’t pay off your statement balance in full each month, making the minimum payment each month will keep your account in good standing.
• Check your credit reports for errors: Review your credit reports often for errors – like payments you made on time reported as late – that could drag down your credit score. You can check your reports for free weekly from all three major credit bureaus by visiting AnnualCreditReport.com.³

Asking your credit card issuer to increase your credit limit has many advantages like the ability to make larger purchases. But before you request one, contact the company’s customer support team to see how it could impact your credit. And review your income to see if you can handle a higher limit without overspending.

If you’d like to learn how to improve your credit score, read our guide on steps you can take to build top-notch credit.