Denied possible reasons for increasing your credit limit

A larger credit limit gives you more purchasing power, helps your credit use can improve your credit score, and can even help you qualify for credit cards with higher limits. In the absence of an automatic credit limit increase from your credit card company, you can request a credit limit increase. Your credit card issuer will look at your account history, income, and credit history to help you decide whether to increase your credit limit. Unfortunately, credit limit increasing requests are sometimes denied.

 

Here are some reasons why you may have been denied

Here are some reasons why you may have been denied

Later on your credit card or another credit card within the past 12 months

Late payments indicate that you are having difficulty repaying your current credit. Since your card issuer checks your credit report to increase the credit limit, late payments to any other credit card may also result in approval of your denied credit card increase.

 

Balance on this or any other credit card is high compared to the credit limit

Balance on this or any other credit card is high compared to the credit limit

High credit card balances can mean you are already overwhelmed. Credit card issuers are reluctant to grant more credit if it looks like you already have enough credit card debt.

 

Opened too many accounts in the past year or two

What counts as “too many” varies from one credit card company to the next. It may be five or ten. If you have opened multiple credit cards in the past two years, don’t be surprised if a credit limit increase request is turned down.

 

Too much credit available or too many credit cards

Too much credit available or too many credit cards

If you already have several credit cards or a lot of credit available, you are at high risk of being in debt. The credit card issuer doesn’t want to see you in debt. Not because they care about you personally, but because it increases the risk that you would increase your credit card payments and a credit limit would only increase the risk of default.

 

Too Many New Applications for Credit

New applications for credit can hurt your chances of getting a new credit limit increase, even if they have not been approved or if you finally rejected the credit card. Too many newer applications can indicate that you are taking too much credit or that you are in some kind of financial trouble that you need to be repaired with credit.

 

Account is too new

Too Many New Applications for Credit

Many credit card companies require that your account be open between six to twelve months before you are considered for a credit limit increase. It may be longer for some credit card issuers. If your account was opened recently, wait at least six months before getting a credit limit increase for the best chance to get approved.

 

Don’t have enough income to raise a credit limit

Your credit limit is often related to your monthly income. If your income is too low (by credit card issuer standards), your increased credit limit request may be denied.

 

Have had a recent credit limit becoming more common

Monthly payments have been too low

Don’t expect to get back-to-back credit limits raised. It is best to wait at least six months before requesting another credit limit increase.

 

Monthly payments have been too low

If you are paying the minimum or just a little more than the minimum, it may mean that you cannot really make your credit card balance. If you want a larger credit limit, you have to pay a lot more than the minimum. The goal is to pay out at least the majority of your balance each month if you don’t pay in full.

 

Credit Score Is Too Low

Credit Score Is Too Low

Your credit score allows the credit card company to quickly decide whether to grant your credit limit request. A low credit score signals other credit problems that make you a risky candidate for a larger credit limit. Check your credit score to see what factors make them small. Your credit card issuer can also find a free copy of your credit score mail because it was used in the decision to refuse to increase your credit limit.

 

Current default rates on your credit report

If even a single 30-day late payment can keep you from having a credit limit raised, it should come as no surprise that more serious delinquencies like a collection or repossession also get your credit limit refused.

 

What happens after your credit limit is raised to deny request

What happens after your credit limit is raised to deny request

Your credit card issuer sent a letter when information about your credit report or credit score was the reason your credit limit increase was denied. The letter will name the primary factors that contributed to the decision and give you your free credit score or instructions to order your free credit report.

If you want to anticipate a larger credit limit, use your credit cards in a way that will help you get approved. Make all of your monthly payments on time. Use your credit card every month and pay a significant portion of your credit card out of balance. Making large purchases and paying a lump sum on your credit can help in the event that you need a larger credit limit. But be careful that you don’t pay more drawer than you can afford. Finally, minimize your new loan applications in the next few months leading to your credit limit increase request.

You may also wonder if credit card companies can lower your credit limit without notifying you.

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