If you’ve recently job hopped and secured a higher salary — or you just haven’t updated your income information with your card issuer recently — there’s a very simple step you can take to help raise your credit card’s credit limit.
By securing a higher credit limit, you’ll be giving yourself more spending power and keeping your credit utilization rate low — and both of these factors make up a large part of your credit score. Best of all, it can all be done in a hurry within the customer portal of your credit card account.
Below, Select details how you can quickly raise your credit limit — and potentially your credit score — by simply updating your income information with your credit card issuer.
How to raise your credit card limit — and potentially, your credit score
When you apply for a credit card, the issuer will ask for details regarding your current salary. Whether it’s been several years since you’ve applied for a new card or you recently started a new job with a higher salary, it can be advantageous to update your income information.
Keep in mind, however, that if you’re approved for a higher line of credit, it may still take several weeks to appear on your credit report and your potential credit score increase will correlate with how much your credit utilization shifts.
For example, if you have a $40,000 line of credit and are actively using $10,000 of it, your credit utilization ratio is 25%, which is considered to be high. If you’re able to get your credit line extended to $50,000, your credit utilization would then drop to 20%. While this dip will likely net you a few points on your credit score, increasing your credit limit in tandem with keeping your usage minimal is the ideal situation.
One way to do this is to simply call customer service and see if your income information has been updated. If it’s all set, consider asking directly for a credit line increase. It’s beneficial for credit card issuers to give you more credit, which will then give you more flexibility to spend, so don’t be shy. Asking about it won’t hurt your credit score, and the worst thing they can do is say no.
If you’re too shy to speak to someone on the phone, you may be able to do this online within your customer portal. In the Capital One customer portal, for instance, there’s a “Request Credit Line Increase” option — the prompt asks about your current income, the amount of credit you’re requesting and the reason why you’re asking for it. It took me about 30 seconds to fill everything out and I never even had to talk to anyone in customer service. Citibank also offers a similar feature for its credit cards in its mobile app, and you can receive a credit limit increase instantly if you qualify.
Simple ways to raise your credit score
While credit scores tend to involve more complex financial risk models, it’s fairly simple to make small adjustments to get your credit score headed in the right direction. However, maintaining a solid credit score requires the consistency of making solid financial choices in the short and long term. Here are a few easy things you can do to help improve your credit score if it’s less than perfect,.
Check for errors on your credit report
Millions of Americans, in fact, a whopping 25%, have incorrect line items on their credit reports and you could be one of them. If you happen to spot an error the next time you’re going through yours, reach out directly to the credit bureau — either Equifax, Experian or TransUnion, depending on which credit report you’re viewing — to dispute it. You can view and monitor your credit score with a credit monitoring service like Experian or Identity Force.
Refinance your credit card debt
If you suddenly find yourself drowning in credit card debt, you may benefit from refinancing it to a personal loan with a lender such as Marcus by Goldman Sachs or PenFed — doing so can help reduce your debt utilization ratio to zero and consolidate your credit card debt into one place. That said, the key to making this strategy work is to avoid overspending with credit cards as you could end up accumulating even more debt going forward.
Become an authorized user on someone else’s account
If you have a trusted family member or friend with a credit card that has a high credit limit, you may want to consider asking them to add you as an authorized user, which would allow the card to appear on your credit report and could help increase your available credit line. Best of all, many credit cards offer free authorized user accounts and you don’t even need to spend anything for it to count. Just be sure the primary cardholder is paying their bills on-time since their spending habits will have a direct impact on your credit score.
Get credit for paying your bills on time
Many of your bills — your rent, utilities or monthly Netflix subscription — aren’t actually accounted for on your credit report so you won’t get any official credit for paying them on time. *Experian Boost™ now gives consumers an instant ‘boost’ to their FICO® scores by looking back at the last two years of credit history and considering all your recurring bills. The service is free to sign up for and the average FICO score boost ends up being about 13 points.
Bottom line
While higher credit lines are a great way for consumers to acquire flexible spending capabilities, they should never be maxed out. If you haven’t asked for a credit limit increase or you’ve recently received a pay raise, be sure to update your income information with your credit card issuer.
Small actions like this may only make a tiny difference in the short term, but over several years, they can have a significant effect on where your credit score sits. And the better your credit score is, the better lending options you’ll have available for your future financial goals, whether it’s an auto loan or a mortgage.
