How do i increase my available credit

How Credit Limit Increases Work

Your credit limit is set when your card issuer first approves your card application. As you pay your bills on time and stay below your credit limit, you're showing the card issuer that you're able to manage the account responsibly. This may cause them to grant you an increase in your credit limit, which rewards you with more spending power and can make it easier to build your credit.

Each card issuer has their own specific guidelines for granting credit increases. Generally speaking, however, you should be a cardholder for at least six months and should not have requested an increase in the past six months.

Before a credit increase can be granted, your credit card issuer will want to see that you're a good risk. In simple terms, this means:

• You've been a responsible cardholder. This means no late payments or over-the-limit purchases. Going above and beyond—for example, by paying extra each month to pay down your balance faster—could bolster your case.
• Your credit is in good shape. Make sure your payment history, credit utilization and other factors that contribute to your credit score are in top condition across all your credit accounts.
• Your income is adequate to cover monthly housing and debt. If your income has recently increased, you're likely in a good position for your request to be approved. Be prepared to provide your annual income amount if asked.

Ways to Get a Credit Limit Increase

Each card company has its own process, so start by visiting your card issuer's website and searching for information on credit line increases. You may be able to submit your request online or on the card's mobile app. In some cases, you may need to call the number on the back of your card and make your request by phone.

When you request an increase, you could be asked to provide the following information:

• Annual income
• Employment status
• Monthly rent or mortgage payment

You may also be asked why you're requesting an increase and/or how much of an increase you'd like. Be realistic with your request. If your current credit line is $3,000, asking to bump it to $4,000 is more reasonable than going for $10,000 in a single jump.

Do Card Issuers Increase Your Credit Limit Automatically?

Credit card issuers may review your credit file and account every six to 12 months and may offer you a credit line increase when they do. If you've ever logged into your card account or opened your card's app and seen a pop-up screen requesting income information, it could mean your card issuer is considering a credit limit increase.

Providing your income information may help you secure additional credit. But if you don't have that information handy—or you don't want a credit increase at that time—you can ignore the request without any negative consequences beyond missing out on an opportunity to get more credit.

Will I Get Approved for a Higher Limit on My Credit Card?

Whether you're approved for a higher credit limit depends on many factors, some of which you have little control over. For example, if your card issuer is looking to decrease the amount of credit it extends overall due to broad economic conditions, they may be less inclined to grant your request.

In general, though, credit card companies are willing to reward their most responsible cardholders with additional credit. If you've already demonstrated that you can manage a credit line and make your payments on time, you're the kind of cardholder they're likely to want to do more business with.

Of course, they still need to make sure you're a good risk. For that reason, they may want to look at:

• Your credit score
• Your credit report
• The number of new credit applications you've recently submitted, resulting in hard inquiries on your credit report
• Your employment status
• Your expenses, including housing costs and debt obligations

Hopefully, your credit, employment, income and expenses are at least as good as they were when you first applied for your card—and ideally, you've seen improvement on some of these fronts. A request for additional credit can take up to 30 days to review, or it may only take a few minutes. Once your request for a higher credit limit is approved, you'll typically have access to your new credit line immediately. If you're denied, you can try again in six months or a year if your situation has improved. Alternatively, you may want to consider applying for another card, possibly one with more forgiving requirements.

How Could a Higher Credit Limit Help Your Credit Score?

Increasing your credit line gives you more flexibility. You can use your card to make larger purchases without bumping up against your credit limit. Perhaps most importantly, though, an increased credit limit gives you the opportunity to improve your credit utilization. Credit utilization compares the amount of credit you're using with the total amount of credit you have access to, and it's one of the most important factors in your credit score.

Credit utilization works something like this: If you have a $1,000 credit card balance on a card with a $2,000 credit limit, your credit utilization ratio for that account is 50%. Raising your credit limit decreases your utilization ratio if your balances remain the same: If your limit increased to $4,000, your utilization ratio would drop to 25%. Keeping your credit utilization under 30% helps prevent credit card balances from bringing down your score; keeping it to 10% or lower is even better.

If you're able to secure a credit limit increase, be careful not to use your card to run up a balance again. This will only cause your credit utilization ratio to increase and you could even end up with a lower score than you started with. Use your credit wisely.

Growing Your Credit Limits and Your Financial Skills

Successfully raising your credit limit is a solid step forward for your finances. It's a sign that you're managing credit well—and that good money management can open doors for you. Even the process of requesting an increase helps to build your relationship with your card provider.

Are you thinking about requesting a credit line increase? Before you do, check your credit score and credit report to avoid any surprises. You can do so for free through Experian. And to make sure your credit stays in fighting shape, consider free credit monitoring that alerts you to changes in your credit file so you always know where your credit stands.