Boosting Total Available Credit

Boosting Total Available Credit

How increasing your credit limit can help you

One way to boost your credit score is to increase your total available credit. That’s because when you add to your total available credit, your credit utilization ratio (should) go down. That ratio is one of the key factors used in calculating your credit score. Let’s take a look at how to increase your total credit and what it could mean for you.

There are basically three ways you can increase your total available credit:

  1. Do it digitally. Perhaps the easiest method here is to simply head to your credit card issuer’s website and request an increase online. You’ll likely be asked a few questions, including if your income has increased. You’ll be more likely to get an increase if it has. That’s because card companies consider higher income levels a signifier that you can handle more potential debt.

  2. Make a call. Another option is to call your credit card company and ask for a credit increase. They will likely ask you about your income and review your history as a cardholder. The better your history, the better your chances of getting approved.

  3. Apply for a card. The final way to increase your credit limit is to open another card with a higher limit. As always, you should be careful before taking on a new credit card.

If you do get approved for a higher credit limit, your credit utilization ratio will likely go down. That’s a good thing. It shows lenders that you are able to handle debt responsibly. You want your ratio to always be below 30 percent. Let’s say your total available credit is $15,000. If you have a $5,000 balance on your card, your ratio is about 33 percent. Not ideal. Now, if you get your total credit raised to $20,000, your ratio would decrease to just 25 percent. Much better. The new limit is nice, but only if you don’t respond to it by using more of your credit. Keep things low and watch your credit score soar.

Chris O'Shea

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