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Does Increasing Your Credit Limit Affect Your Credit Score?

Last Updated: September 10, 2023

3 min read

Key points about: How a credit limit increase may affect your credit score

Increasing your credit limit may help your credit score if you keep your credit utilization low.
If your lender does a hard inquiry to approve your credit score increase, your score may go down.
An increase in income can make you eligible for a credit limit increase.

Your credit limit is the maximum balance you can have on your credit card. Increasing your credit limit could help your credit score, leave it unchanged, or lower your score, depending on the circumstances.

Find out what factors could cause you to hurt your credit score, and when it’s the right time to ask for a credit limit increase.

How can increasing your credit limit affect your credit score?

All things being equal, increasing your credit card limit will reduce your credit utilization ratio. The credit utilization rate is the amount you owe as a percentage of your total credit limit. A low credit utilization rate may help your credit score more than a high utilization ratio.

If you increase your credit limit, your spending habits remain about the same, and you continue to make on-time monthly payments, your utilization ratio would go down, and this could have a positive impact your credit score.

However, if you increase your spending too much after increasing your credit card limit, your credit utilization ratio may increase, and that could negatively impact your credit score.

For example, if you have a $1,000 credit card limit and spend $500 before you pay the bill, that’s a 50% credit utilization ratio. But if you get a credit limit increase to $2,000 and then spend $1,500 before you pay the bill, your credit utilization ratio will go up to 75%. Experian recommends keeping your credit utilization ratio under 30%.

Your credit score may also be affected by a credit card limit increase because of a hard inquiry. When a lender obtains a copy of your credit report to decide whether to grant your request for additional credit, this results in a hard inquiry on your credit report. Hard inquiries usually do not have a significant impact on credit scores unless many occur in a short period of time.

When to ask for a credit limit increase

Asking for a credit limit increase at the right time could affect your chances of being approved. Consider these things before requesting a credit limit increase from your credit card company.

You received a raise: Reporting an income increase could show credit card issuers you have the ability to repay more debt.
You make on-time payments: Credit card issuers take into account your payment history and how reliably you make payments on all of your loans.
You have a low credit utilization ratio: Using only a small percentage of your available credit typically shows that you can handle credit responsibly.
Your credit score is good to excellent: Credit card issuers are more likely to issue additional credit if you have handled your existing credit well. A good credit score usually indicates responsible credit card use.

You can request a credit limit increase on your Discover Card by logging into the Discover Account Center, selecting “Card Services” and then “Credit Line Increase.” Or on your Discover Mobile app, select “Services” and then “Credit Line Increase.”

You can also request a credit line increase by calling the phone number on the back of your Discover Card.

What you should consider before requesting a credit limit increase

You applied for a new line of credit: Applying for a new line of credit and requesting a higher credit limit can both result in a hard inquiry. Multiple hard inquiries may negatively impact your credit score and potentially show financial hardship.
Your income has decreased: If you recently transitioned to a lower-paying job, it could affect being approved for a credit limit increase.
Your credit isn’t good: If your credit isn’t good, it may be best to work on improving your credit score before requesting a credit limit increase.

Did you know?

If you’re looking for new credit, you may want to consider a credit card that rewards you for cash back on all your purchases. You can compare Discover credit cards with other industry-leading cards to find the one that best fits you and how you spend.

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Automatic credit limit increases

Requesting a higher credit limit isn’t the only way to get one. If you have used your credit card responsibly and have made on-time payments, your credit card issuer may automatically increase your credit limit.

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