Does CC Limit Increase means better Credit Rating ?

nuriel

Hi,

Sorry if this was already asked. My credit card limit is £5K and it is way above what I ll ever spend on it - £50 to £100 a month, paid every month. Would it help my credit rating if I increase the limit (if I am eligible, I think I am), knowing that I won't change my spending habits ?

Nuriel

MrSilk

Credit increases are given depending in your history of repayments to the credit card issuer.

It does not mean that your credit rating is improving, but your internal score with the credit card issuer is.

jpb77

Also depends on the credit report feed that they receive each month from the credit agencies, so they also monitor your credit behaviour elsewhere. They particular monitor your credit ratio (i.e. balance vs limits) to ensure your not financially stressed.

TIP: Make sure your balances are not more than 30% of your credit limit. i.e. £300 balance with a £1000 credit limit. You get the gist. This will be evident that you do not rely on credit too much. If you max your cards out all the time elsewhere, this looks like your financially stressed and future credit limit increases will look unlikely with your card issuer.

If your issuer increases your limit - this will show on your limit history recorded with the credit agencies and this will show a positive effect on your report and will tell other credit providers when they search your report that you are low risk.

Paul_Herring

An increase in limit is likely to reduce[1] your credit score, since it increases the amount of credit you have available to you.

If you don't need the limit, I wouldn't bother asking.

[1] slightly - depends on the amount as a proportion of credit you already have - the more credit you currently have available the less it will affect it

InsideInsurance

[1] it is more complicated than that

Increasing available credit CAN reduce the score but can also improve it if it improves the debt:available ratio or raises the maximum limit you have for a single account

All lenders have their own scoring system and so what one likes another can hate