How do you increase your credit limit?
If you have a credit card or overdraft but want to increase your credit limit, how can you go about it? This guide looks at what you can do to increase your limit and, more importantly, whether or not you should.
What is a credit limit?
When you apply for a credit card, you don’t know what the credit limit will be, although the lender may tell you the maximum for new customers.
That can be a real problem in some cases. For example, if you want to transfer an existing balance, to take advantage of a 0% deal, but your credit limit is too small to do so, you might be disappointed.
If you aren’t happy with your credit limit, you can request a higher limit from the credit card provider.
However, it is a good idea to wait for several months first so that the lender can see that you are a sensible customer.
Of course, if you exceed the limit on your card or miss any payments, the credit card company or bank won’t agree. Not only that, but you’ll damage your credit rating, which may stop you getting a better credit deal elsewhere.
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How to improve your credit score
When you want your lender to increase the amount you can borrow, you need to be as creditworthy as possible. They won’t give you a higher limit if they think you’re likely to default or if they think you can’t afford to repay in full.
Lenders decide whether or not you’re a suitable customer by looking at your credit record and in many cases, carrying out a credit score as well as other checks. Sopurce moneyadviceservice.org.uk