A higher credit limit gives you more purchasing power, helps your credit utilization, can help improve your credit score, and can even help you qualify for credit cards with higher limits. In the absence of an automatic credit limit increase from your credit card issuer, you may request an increase. Many card issuers, like Chase, allow you to apply online.
Your credit card issuer will consider your account history, income, and credit history to decide whether or not to raise your credit limit. Unfortunately, credit limit increase requests are sometimes denied.
Some Reasons Why You May Have Been Denied
Many of the reasons why you might be denied are the same reasons why you might be denied if applying for a new card:
- Late on this or another credit card within the past 12 months: Late payments indicate that you may have trouble managing your current credit obligations. Since your card issuer may check your credit report to approve your credit limit increase, late payments to any other credit card can lead to your credit limit increase being denied.
- A high balance on this or other cards relative to the credit limit: High credit card balances may mean you’re already overextended. Credit card issuers will be hesitant to grant you more credit if it looks like you already have high credit card debt.
- Opened too many accounts within the past one or two years: What counts as too many will vary from one credit card issuer to the next. If you’ve opened several credit cards in the past two years, don’t be surprised if a credit limit increase request is turned down.
- Too much available credit or too many credit cards: If you have several credit cards or a lot of available credit already, you have a high risk of getting into debt. The credit card issuer doesn't want to see you get into debt because it increases the risk that you'll default on your credit card payments. A credit limit increase would only increase the risk.
- Too many recent applications for credit: Recent applications for credit can hurt your chances of getting a new credit limit increase, even if you weren’t approved or if you eventually turned down the credit card. Too many recent applications can indicate that you’re taking on too much credit or that you’re in some type of financial trouble that you need to fix with credit.
- The account is too new: Many credit card issuers require that your account be open between six to 12 months before you can be considered for a credit limit increase. It may be longer for some credit card issuers. If your account was opened recently, wait at least six months before requesting a credit limit increase for the best chance at getting approved.
- Not enough income for a credit limit increase: Your credit limit often is related to your monthly income. If your income is too low by the credit card issuer’s standards, your credit limit increase request may be denied.
- Already had a limit increase recently: Don’t expect to get back-to-back credit limit increases. It’s best to wait at least six months before requesting another credit limit increase.
- Record of low monthly payments: If you’ve been making only the minimum payment or only a little more than the minimum, it can mean that you can’t really afford your credit card balance. If you want a bigger credit limit, you’ll need to pay much more than the minimum. Aim to pay off at least the majority of your balance each month if you don’t pay in full.
- The credit score is too low: Your credit score allows the credit card issuer to decide quickly whether to grant your credit limit increase request. A low credit score signals other credit problems that make you a risky candidate for a bigger credit limit. Check your credit score to see what factors are making it low. Your credit card issuer also will mail you a free copy of your credit score since it was used in the decision to deny your credit limit increase.
- Recent major delinquencies on your credit report: If even a single 30-day late payment can keep you from getting a credit limit increase, it should come as no surprise that more serious delinquencies like a collection or repossession also will get your credit limit increase denied.
After Your Credit Limit Increase Request Is Denied
Your credit card issuer will send a letter if the information on your credit report or your credit score was the reason your credit limit increase was denied. The letter will name the primary factors that contributed to the decision and include your free credit score or instructions to order your free credit report.
If you anticipate wanting a higher credit limit, use your credit cards in a way that will help you get approved. Make all your monthly payments on time. Use your credit card each month and pay off a significant portion of your credit card balance. Making big purchases and paying a lump sum toward your balance can help the case that you need a higher credit limit. Be careful that you’re not charging more than you can afford to pay. Finally, minimize your new credit applications in the months leading up to your credit limit increase request.
Frequently Asked Questions (FAQs)
What happens if you go over your credit limit?
If you go over your credit limit, your credit card account could be frozen, and it might not process any more transactions until you pay down some of your debt. Going over your credit limit will also hurt your credit score.
How much of your credit limit should you use?
As a general rule of thumb, it's a good idea to keep your credit utilization ratio under 30%. If your credit limit is $1,000, then you want to keep your balance below $300. That 30% level should be considered the maximum. When possible, keep your utilization ratio even lower.
FAQs
You could be denied a credit limit increase for many reasons, such as a history of late payments, too low of a credit score, too little credit history, too many recent applications, or an inadequate verifiable income. If you were already approved for a credit limit increase recently, that could be another reason.
Why do I keep getting denied when I have good credit? ›
They might look at not only the income figure but also how stable your income has been. Debt. One of the most common reasons people are rejected for a credit card — even people with good credit — is a high debt-to-income ratio.
Why is my credit limit so low when I have good credit? ›
A credit card issuer or other lender might assign you a low credit limit based on a number of factors. These could include your income, credit history (or lack thereof) and their internal policies for managing the risk that their customers won't repay what they owe.
Why am I being refused credit with good credit score? ›
There are a few reasons your application might have been rejected, including: having a short credit history – it can take time to build a solid credit history. applying for too much credit in a short time – hard credit checks are recorded on your credit report, and having too many can negatively affect your application.
Why did Discover deny my credit increase? ›
Some common reasons for a denied credit limit increase request might be infrequent usage of the card, missed payments or a low credit score. Cardholders can improve their chances of success by using the card regularly, always paying on time and keeping a low utilization rate.
Why do I keep getting denied for credit increase? ›
You could be denied a credit limit increase for many reasons, such as a history of late payments, too low of a credit score, too little credit history, too many recent applications, or an inadequate verifiable income.
Why would I get denied a credit card with excellent credit? ›
You may also have a history of high credit utilization. If you consistently max out your credit cards, for example, issuers may be hesitant to offer you new credit even if you always make your payments on time. Or maybe you've applied for too much new credit within a short time period.
What is a normal credit limit increase? ›
Typically, the bank will consider increases from 10% to 25% of your current limit. Anything higher could trigger a hard inquiry on your credit report, and that can in turn lower your credit score.
What credit card has $5000 limit with bad credit? ›
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| Petal® 1 No Annual Fee Visa® Credit Card* Learn More on Petal's secure site | 4.1 Winner: Unsecured | $300 to $5,000 |
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9 more rowsYes, credit limit increases can happen automatically if your information is kept up to date, like employment status and total annual income. Cardholders in good standing (e.g. good credit score, consistent on-time payments) may also receive an automatic credit limit increase once or twice a year.
A hard inquiry from a card application can cause a small, temporary drop in credit scores. A denial or approval won't hurt your credit scores, because decisions aren't reflected in credit reports. When making lending decisions, card issuers use credit reports and credit scores to determine creditworthiness.
Is 934 a good credit score? ›
Different companies will be looking for different things in potential customers, so while you may be one lender's cup of tea, you may not tick all the boxes for another. We provide a score from between 0-999 and consider a 'good' score to be anywhere between 881 and 960, with 'fair' or average between 721 and 880.
Does being denied a loan hurt credit? ›
The Bottom Line. Getting denied for a loan or credit card will not be recorded on your credit report, and it will not directly impact your credit scores. To improve the chances that you'll be approved for credit, you may want to take a look at your credit before you apply, and take steps to improve it if you need to.
Why doesn't my credit card limit increase? ›
The bank fixes the limit, depending on their perception of your ability to pay. Some of the factors they take into account are your income – higher your income, higher your Credit Card limit is going to be. Another thing they look at is your Credit Score, which depends on your record of repayments of debt.
Can I overpay my credit card to increase limit? ›
The maximum amount that can be paid is for the posted balance in full. Pending transactions aren't included because the merchant hasn't collected their funds from the authorization yet. And overpayments aren't guaranteed to create excess available credit.
Is it better to get a new credit card or increase the limit? ›
If you like your current card, asking for an increase could be the right move. But if you're looking for additional rewards or a better rate, opening a new line of credit may be the right option. No matter what you choose, always remember to use credit responsibly and spend within your means.
Why am I not getting approved for a loan with good credit? ›
Some common reasons someone with a good credit score may be denied are having too much existing debt, not having enough income or having too many recent hard inquiries.
Why do I keep getting rejected for credit? ›
You have late or missed payments, defaults, or county court judgments in your credit history. These may indicate you've had trouble repaying debt in the past. You have an Individual Voluntary Agreement or Debt Management Plan. This might suggest that you can't afford any more debt at the moment.
Why can't I get a loan if my credit score is excellent? ›
If there's concern that the account you're applying for, combined with your existing financial commitments, will strain you, they may decline the application. Having a high Credit Score may not be enough to be accepted if the potential lender finds your affordability too low.
