When you request a credit limit increase from your credit card provider, your current debt ratio and your projected debt ratio after the increase are taken into account. While increasing your credit limit is a great way to boost your credit score, it might not be that easy. After the financial crisis of 2008 and 2009, most banks were a little more careful when assessing the credit they offer to consumers, including credit card debt.
Many consumers are denied an increase in their credit limit due to insufficient income. The credit card issuer wants to see income that can reasonably support the amount of credit requested. For example, if you only earn $ 20,000 a year, don’t expect your credit limit to be increased to $ 15,000. The issuer also reviews your payment history with their institution and any other institution you have held an account with by extracting and reviewing your credit history report. These play an important role when the card issuer’s credit analyst reviews your request for a credit limit increase. The analyst determines whether to approve your request by comparing these factors to the lender’s guidelines to create a risk assumption.
If you are denied the increase in credit limit you requested, consider submitting another request for a lower amount increase. Sometimes the credit card issuer thwarts your request and offers a lower credit limit that they support. Alternatively, you can search for a credit card issuer who can offer you more lenient terms.