# How to request a credit limit increase: What to know

March 15, 2024

## For increased purchasing power and the flexibility to make larger purchases, increasing your credit limit could be a smart choice — here’s how.

Whether you’re making a planned purchase or faced with an expensive emergency, access to extra credit can be pivotal in keeping your finances balanced. To broaden your financial options, it might be helpful to request an increase on your credit limit. Depending on your credit history, this can be a smart financial move.

## Why request a credit limit increase?

While credit cards can be incredibly useful tools for making purchases (when used prudently), their utility is limited if you don't have enough credit to support your needs. When you're faced with high emergency expenses or you want to make a big-ticket purchase, having a higher credit limit can make all the difference.

### 1. Lower credit utilization rate

Credit utilization refers to the amount of credit used on credit cards and other lines of credit. The rate is your credit compared to how much you owe your creditors. The lower the better, but experts suggest a rate of less than 30% is good.  But what does that have to do with raising your credit? It’s in the math.

If your credit utilization rate is high, an increase of your credit limit could lower that rate. More credit means the ratio of debt to credit is farther apart, giving you a lower credit utilization ratio. Let’s dig a little deeper with an example:

#### How to calculate your credit utilization rate

The formula for calculating your rate is your available credit versus what you currently owe. For this example, let’s say you have a credit limit of \$5,000 and you have used \$2,000 of that credit. \$2,000 divided by \$5,000 is 0.4, otherwise known as 40%.

\$2,000 ÷ \$5,000 = .4

A credit utilization rate of 40% is a bit on the high side, as creditors view having more debt as a risk factor when lending or offering credit.

In this example, if you increase your credit limit to \$7,500, you have lowered your utilization to 27%.

\$2,000 ÷ \$7,500 = .27

Lower utilization rates are generally more favorable, as creditors view having more debt as a risk factor when lending or offering credit.

### 2. Improved credit score

Another added benefit of keeping your credit utilization rate down might be an increased credit score. Credit bureaus view your utilization ratio as a deciding factor when calculating your credit score, so lowering your credit utilization rate may in turn give your score a boost. Having a good credit score improves your buying power, such as access to better rates on loans and insurance, as well as a better chance of approval for a rental application or even a job.

### 3. Emergency funds

Another benefit of a higher credit limit is having more financial flexibility in case of an emergency. Whether it's a last-minute plane ticket to help with a family emergency or a car repair that you can't put off any longer, having a higher credit limit gives you the option to pay for these expenses with your credit card, which can provide immediate relief as you work on a longer-term solution.

## How to request a credit limit increase

Your credit limit is determined in part by your creditworthiness, which is reflected in your credit score.  Other factors taken into consideration are your payment history, amounts owed, length of credit history, new credit and credit mix. Before requesting an increase, make sure you know where you stand.

If your credit score has improved since you got your credit card, your chances of being approved for a higher limit may be better. Conversely, if your credit score has dropped due to missed payments or other negative factors, your chances may be lower.  To always understand where your score is at,

### 2. Analyze your income and expenses

Your income and expenses also play a major role when determining how much of an increase you may qualify for. You should be confident that you're able to manage a higher credit limit responsibly. Ideally, you should be able to manage a low debt-to-income ratio and few expenses or debts even after your credit limit increases.

If you have other debts or liabilities, such as student loans or a mortgage, this could affect your chances of getting a higher credit limit.

### 3. Contact your credit card issuer

Starting the process of increasing your credit limit can often be done online or via your mobile banking app. Otherwise, you can make this request over the phone or by mail. Choose the method that’s most convenient for you and follow the prompts.

You may need to provide some personal and financial information, such as your income, employment status, assets and other debts. Here are some examples of what you can expect to be asked for:

•  Your annual income/joint-owner’s annual income (if applicable)

•  Your monetary assets/joint owner’s monetary assets (if applicable)

•  Employment status

•  Monthly housing payment

Keep in mind that your credit card issuer may take some time to review your request, especially if you’re requesting via mail.

### 4. Provide any additional information.

You may be asked for additional documentation or information to support your request. The financial institution should offer you a list of all potential documentation needed. Make sure you have everything prepared before you make your request so you can provide the necessary information quickly and easily.

After you've made your inquiry, you may also be asked why you’re requesting an increase. Be clear and accurate, and don’t hesitate to ask questions if you need clarity.

## Credit limit increase FAQs

There are a lot of factors to consider when requesting an increase to your credit limit. Here are answers to some common questions:

### What is the approval timeline for a credit limit increase?

The approval timeframe varies by institution. For example, it takes an average of 3 days to receive a notification about your request from U.S. Bank. If approved, you’ll be able to see your increased limit in online banking under your credit card account.  Generally, takes 7-10 days for the official notification to be delivered via mail.

### What if my request to raise my credit limit is denied?

If your request to increase your credit limit is denied, the decline letter from the financial institution will outline the specific reason(s) why.

Did you know?  If your credit score is a reason for the denial, there are six simple steps that can help you improve it.

### Does requesting an increase hurt my credit score?

Requesting an increase may trigger a pull of your credit history.  Be prepared that the review of your credit history will result in a hard credit pull.   A hard pull will typically impact your credit score, lowering it a few points for a short period of time.

### Are there downsides to raising my credit limit?

Requesting an increase in your credit card limit can be a smart move if done wisely. Financial responsibility is key here, as you need to make sure an increased limit wouldn’t result in spending more than you’re able to pay back. Your credit score and financial health depend on it.

### How soon after I open a credit card can I request an increase?

The time required from opening an account and requesting an increase varies from creditor to creditor. This time period is usually greater than 6 months. Remember to maintain a good payment history and avoid requesting increases too frequently.

Requesting an increase to your credit limit can give you more financial freedom but consider the decision carefully. Do some homework, review your financial needs or make a pros and cons list.

If you practice healthy financial habits, asking for an increase could provide you with more financial security and peace of mind.

If you have questions or want to know more about how to request an increase to your credit limit, make an appointment with a U.S. Bank banker today.

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### Disclosures

Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, Home Equity and Credit products are offered through U.S. Bank National Association. Deposit products are offered through U.S. Bank National Association. Member FDIC.