im young and responsible i dont go credit card crazy. ive actually have never met my credit limit but was thinking about increasing the limit only if it would help me build a good credit score. should i increase the limit or just stick to what im doing?
2006-08-09 10:50:47 · 12 answers · asked by *Debster* 2 in Business & Finance ➔ Credit
better credit means lower interest rates
2006-08-09 10:54:22 · answer #1 · answered by Anonymous · 0⤊ 2⤋
Did you mean affect or effect? I will try both. You do not increase your credit limit. You request one and if you're credit worthy, the lender may increase the limit. The EFFECT of this is good, you potentially have more money available to spend. This in turn will have a negative EFFECT because the more you borrow the more you have to pay every month, and potentially the higher the service charges (Interest if balance not paid in full).
How does an increase in credit limit AFFECT your credit rating? It should not - only the actual balance or debt you carry from month to month is reported to the service bureau and that will have an impact, or will AFFECT, your credit rating. Other lenders may judge that you are over stretching your purchasing and acquisition power, i.e., not enough income to pay the debts (income to debt ratio). If you are responsible, keep up the good work - most young people are not good with credit cards. Take all the credit you can get to build a credit history, as long as you continue to be wise, and spend only what you can pay every month (the whole balance I hope), using the lenders money free for about a month - no interest charges, no service charges.
2006-08-09 11:33:39 · answer #2 · answered by 'stavo 2 · 0⤊ 0⤋
I would not request a credit limit increase unless I needed it for a particular reason, and I was able to pay off that particular expense within one billing cycle. I wouldn't recommend increasing your credit limit just to increase your credit score. The impact will be relatively minimal compared to what fun you may encounter if you should start using some of that newly available credit. If you are not already paying credit card bills in full every month, I strongly recommend against requesting a credit limit increase. If you keep your accounts current and limit any balance you carry on your present credit limit, then you will be doing your credit score a great service.
2006-08-09 15:28:57 · answer #3 · answered by Freddie 3 · 0⤊ 0⤋
Increasing your credit limit will not raise your credit score.
The only thing that constantly raises your score is making your monthly payments on-time.
If your financial institution approves you for a credit increase, they may lower your interest rate. This is a good thing if want to purchase a big ticket item and have lower monthly payments.
If you are looking to purchase a home in the next few year, having a high credit limit may look bad in the eyes of some lenders.
The truth is it's all subjective. Every creditor and credit reporting agency has their own standard for determining credit worthiness.
So do the research...
2006-08-09 11:21:24 · answer #4 · answered by Tim T 2 · 0⤊ 0⤋
I agree with the rest of the posters as far as credit line increases DO help your credit.
The one poster that said it may ding your credit either thinks that having an increase hurts it or should the card company pull a credit report to give you the increase is what dings your credit.
Some companies will pull a credit report to do a credit line increase, most don't. You might ask about that when you request the increase. If they say that they do pull a report, ask them not to. Sometimes asking them not to works, sometimes it doesn't.
But, even if they do pull a report, it will be a small ding. Probably less than 7 points. And in 6 months that inq will be less effective and by a year, it will have no effect.
edited to add: Tim - my scores "always" rise "right after" I receive a credit line increase.
2006-08-09 11:25:07 · answer #5 · answered by echo 7 · 0⤊ 0⤋
Go for the increase. When you get a mortgage, they're going to look at the length and size of your credit limit along with how responsible you've been with it. A good credit limit on any card is $5,000 - $10,000.
2006-08-09 11:21:06 · answer #6 · answered by Jonathan S 2 · 0⤊ 0⤋
If you're not worried about going overboard, then an increase in your credit limit would be good for your credit. Your credit score is partially based on your debt to credit ratio.
2006-08-09 10:54:40 · answer #7 · answered by smartsassysabrina 6 · 0⤊ 0⤋
If you don't want to borrow more money. It is advised to keep the limit as it is. Every time you increase your limit or get a new card it add a dent to your credit score.
Hope this helps.
2006-08-09 10:55:31 · answer #8 · answered by moin_anjum 5 · 0⤊ 0⤋
More credit, higher credit rating, you can borrow more money - and *good* credit means that you pay back with you owe diligently and you are a good customer for more credit.
2006-08-09 10:55:51 · answer #9 · answered by robert43041 7 · 0⤊ 0⤋
If your not using your current limit, don't change anything. The card issuer will raise your limit anyway to encourage you to spend more.
2006-08-09 12:23:26 · answer #10 · answered by STEVEN F 7 · 0⤊ 0⤋
it relies upon on how they qualified you.... in the event that they regarded at your credit bureau, then definite it does result it any inquiry does in the event that they based it on your account historic previous completely with them, it won't i could assume they does no longer have regarded at your credit bureau in case you probably did it by utilising telephone, in case you signed and mailed something i could assume they did
2016-09-29 02:32:58 · answer #11 · answered by lyon 4 · 0⤊ 0⤋