Whether establishing credit for the first time, or bouncing back after years of poor credit, it’s likely that you’ll start off with a low credit limit when you are issued a credit card. After some time has passed and you’ve made timely payments, you might qualify for a credit increase automatically, but it’s not always a given. If you’ve been working hard at building up your credit score and you’re ready to take on the financial responsibilities of an increased credit score, you might need to take action by requesting one. The following tips can increase your chances at getting improved for a larger line of credit:
Time it right
If you haven’t had your account open long enough, your request for a credit increase will likely be denied. As such, make sure you confirm just how long it’s been since you’ve had the credit card open, and make sure at least six months have passed, at an absolute minimum. If you can wait even longer and you’re not given a credit increase automatically, you’ll have a much better shot.
Before you make your request
When used responsibly, receiving more credit can help you build your credit score up even more, but otherwise, can get you in more debt. Before you ask your credit card issuer for an increase, ask yourself why it is you want that additional credit. If you want it because you’re looking to build up your credit and you know you’ll be able to pay off what you spend quickly, that’s one thing. But if you’re asking for it without a way to pay it off anytime soon and you know you’ll only be able to make minimum payments, you might want to reconsider. Not only can this cause your credit score to go down, but being in extra debt can be a huge financial burden, especially if your credit card has a high interest rate. Once you identify the reasons why you want the increase, make sure you’re asking at the right time. Not only is it important to wait until enough time has passed as mentioned above, but you’ll also want to make sure your credit score has actually gone up since you initially opened up on that credit card. Pull your credit report and get your credit score to see where you stand. Ask for the increase if there’s been an improvement, but if there hasn’t been much or any change yet, hold off.
Don’t ask for too much
If you ask for a credit increase, there’s a good chance you’ll be asked about how much additional credit you want. A reasonable request is typically a 10 to 25 percent increase. Asking for anything more than that can be risky, and you might be turned down and not get any credit increase at all. Additionally, don’t actually specify the amount you’d like first, and only do so if you’re asked.
Watch out for added fees
Sometimes, consumers will need to pay certain fees by asking for and receiving a credit increase. When you put in your request for an increase, ask about these fees upfront. In case there are any, you might want to reevaluate your need for a credit increase, and could just be better off applying for a different credit card. At the very least, you’ll want to know about these fees ahead of time and so you’re not caught off-guard.
If you don’t receive the credit increase you were hoping for, it could be because your credit score isn’t good enough yet. Just keep working at it and give it some time. If you need extra cash to take care of bills and past due debts, Peachtree Financial Solutions may be able to help if you’re receiving long-term structured settlement payments. Contact Peachtree today to learn more about selling some or all of your future payments for a lump sum of cash.
Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.