How Long Does It Take To Increase Your Credit Limit?

Credit cards help you keep up with your monthly bills and discretionary expenses. But what happens if you need extra cash now and are at your limit? Some people need higher credit limits to address a sudden need for extra cash. Read on to find out how long it takes to increase your credit limit and ways to increase your chances of raising your limit.

Are credit limit increases automatic?

When you prove that you use your credit responsibly, some credit card companies may initiate an automatic credit limit increase. Other credit card issuers only consider a credit limit increase if you ask.

Some issuers do a soft or hard pull of your credit report, so it’s a good idea to find out how the process works before you ask for a credit limit increase. A soft pull won’t affect your score, but a hard pull can lower your score because it may appear in your credit report for at least two years. 

Factors that influence the speed of credit limit increases

Wondering how long it will take for you to receive an automatic credit limit increase? The timeline depends on a few key factors that are within your control.

Length of credit history and creditworthiness

Consumers with lengthier credit histories tend to get credit limit increases. Creditors like to see consumers who have multiple years of experience with managing financial obligations. If you build your credit score along the way, you can get a credit limit boost sooner than expected.

Payment history and credit utilization ratio

Your payment history and your credit utilization ratio make up a combined 65% of your FICO score. Making on-time payments and depleting debt balances on your credit card and other financial products will help improve your score. A credit utilization ratio below 30% can help improve your score, but it is optimal to get your utilization ratio below 10%. A credit cardholder with a $10,000 limit would need $1,000 in credit card debt to have a 10% credit utilization ratio. Generally the lower the ratio, the better.

Regular credit limit increase requests versus automatic increases

You can request a credit limit increase if the automatic increase doesn’t arrive soon enough. However, a request will trigger a hard credit check, which will hurt your score in the short term. You should not request a credit limit increase if you plan on applying for a mortgage, auto loan, or similar financial products soon.

Benefits of a credit limit increase

A larger credit limit typically raises your purchasing power. If the approval process is fast, you could have access to more credit immediately. Yet increased spending power is just one of the many benefits of a credit limit increase. 

Lower credit utilization rate

When used wisely, a higher credit limit could increase your credit score. Your credit utilization rate determines 30% of your credit score. This ratio examines the amount of credit used compared to your total available credit. A lower percentage is usually better for your credit score. When your available credit increases, but your spending stays the same, your credit utilization ratio drops. This could lead to a higher score.

Earn more credit card rewards

Your increased limit gives you more credit to work with. You can use your credit card to cover monthly bills and rack up rewards in the process. You have to pay those bills anyway, so you might as well receive something back. Just make sure you pay off your credit card balance in full each month to avoid interest. A few extra rewards are not worth an unmanageable pile of credit card debt.

Helpful in emergency situations

Emergency repairs and unexpected trips can strain your finances when money is tight. An increase in your credit limit gives you extra funds to work with. 

Allows for larger purchases

Your credit card may offer price protection, warranties, or coverage for lost or damaged goods, which can be useful when making large purchases. If you use your credit card for a large purchase, pay the balance in full to avoid fees. 

Easier to secure future loans

Minimizing your credit card usage can help improve your credit score. It can make it easier to get credit, and you might qualify for lower interest rates. Consumers with high credit scores can save a lot of money in the long run by securing lower rates for their loans.

How often should you ask for a credit limit increase?

If you request a credit increase and are denied, your credit card issuer should tell you in writing why they rejected your request. If your financial situation changes, you may want to try again. It’s generally good advice to space out your request by at least six months, but consider the right amount of time for you to improve your financial situation and take the time you need. 

When to consider a credit limit increase

If you have a good chance of getting approved, it may be time to ask for an increase in the credit limit. 

You’ve made more income

Your increase in income gives card issuers added confidence that you have the financial means to repay what you owe. Picking up a side hustle or working a part-time job may give you the extra income you need to secure a higher credit limit and other advantages. 

Your credit score has improved 

The higher your credit score, the more likely you are to be approved for an increase. If your score improves, it may be time to ask for more credit. 

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MoneyLion offers a free and convenient way to find offers from our trusted partners to help you improve your credit — such as credit monitoring, credit report disputes, and getting credit by paying bills. A good credit score can lead to lower interest rates and increased borrowing power on loans and credit cards. 

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Your payment history is strong

Card issuers consider how well you manage debt when raising your limit. When you have a long history of timely payments, your chances of getting approved for an increase in the credit line will improve. 

You’ve paid off debt

Your credit card issuer may compare your monthly debt payments to your income, known as your debt-to-income ratio. This ratio drops as you pay off debt, which may make it easier to qualify for a credit increase.  

You haven’t recently applied for credit 

If it has been a few years since you applied for credit, it might be a good time to ask for a limit increase. Your credit score may not be impacted even if you get turned down. 

Factors that could hurt your chances of a credit limit increase

You should try to time a credit limit increase when you are likely to get approved. If the situations below apply, it may be better to wait. 

You’re unemployed

Credit card issuers are likely to look at your income to decide whether to extend an increase in the credit limit. Not having a steady job can affect your chances of getting a credit line increase.  

Your credit score has dropped

If your score has dropped because you are behind on payments or have too much debt, your request could be rejected.

You’ve recently applied for financing 

Lenders are less likely to increase your credit limit if they know you have applied for financing with someone else. This may indicate that you are overextended or need to borrow money quickly. 

You have inquiries or late payments on your credit report

Late payments and multiple requests can make it challenging to get more credit as they drop your score. Falling behind on payments or seeking credit elsewhere can signal to a lender that you may not be able to pay what you owe.  

Raising Your Credit Limit Over Time

A credit limit increase can come in handy when you need more spending power. If used wisely, an increase in credit can improve your credit score and future financing opportunities. But it is essential to consider your financial situation before pursuing a credit limit raise. If your circumstances are such that you might be turned away, it might be better to wait. 

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