Unsure if I should increase credit limit

Plopp

The bits I think are important:

- Hoping to get a mortgage at some point this year (though it looks like most places are above my comfortable price so unsure if this really will happen)

- Monzo are offering me an increased Flex limit of £3550 (with a deadline of 27 June) so it's not like I'm asking for more credit? Current limit £1600

- I always pay on time, no real need for an increase (except potentially in the future might be useful for costs associated with buying a flat)

I understand it looks bad to increase credit limit before buying, but I've been offered this so unsure if that makes a difference? I also understand it looks good if the bank thinks you are able to borrow more? 

I'm a bit confused!

Many thanks for your advice

retiredbanker1

How much do you spend on it every month and do you always pay in full?

If you do then accepting the higher limit may do your credit files more good than bad. Why? - Because you will be using less of your total limit %

CliveOfIndia

All other things being equal, I'd say accept the increase.  Other lenders will see that Monzo trust you with a higher limit, which is a small positive factor.  It'll decrease your percentage utilisation ratio - though this is completely immaterial as long as you pay in full every month.

To that point, you must make sure you do always repay in full each month (unless there's a low- or zero-rate promotion in force).  Don't be tempted to go out and spend more than you can afford.  So long as you always repay in full, then it'll reflect positively on your credit history.

Plopp said:

I understand it looks bad to increase credit limit before buying

It's a "little bit bad", if that makes sense.  But it's also a "little bit good".  It's applying for a completely new line of credit that's a no-no in the run-up to a mortgage application.  Balancing out the pros and cons, it probably won't make a great deal of difference overall.  And as long as you continue to use the available credit responsibly, it'll probably do more good than harm in the medium-to-long term.

Nasqueron

retiredbanker1 said:

How much do you spend on it every month and do you always pay in full?

If you do then accepting the higher limit may do your credit files more good than bad. Why? - Because you will be using less of your total limit %

The limit % is really only a factor for people carrying a balance and not on a promotional rate, credit agencies love to bang on about utilisation but really if you are paying off every month in full, whether OP spends £16 or £1600 is largely immaterial with years of credit history

35har1old

Plopp said:

The bits I think are important:

- Hoping to get a mortgage at some point this year (though it looks like most places are above my comfortable price so unsure if this really will happen)

- Monzo are offering me an increased Flex limit of £3550 (with a deadline of 27 June) so it's not like I'm asking for more credit? Current limit £1600

- I always pay on time, no real need for an increase (except potentially in the future might be useful for costs associated with buying a flat)

I understand it looks bad to increase credit limit before buying, but I've been offered this so unsure if that makes a difference? I also understand it looks good if the bank thinks you are able to borrow more? 

I'm a bit confused!

Many thanks for your advice

My credit report suggested that if I increased the limits it would improve the score but the score is meanless anyway