Improve Credit Scores By Increasing Credit Card Limit

Asking Lenders to Increase Credit Limit to Improve Credit Scores

Once a credit card account is opened for a long time and even if it is carrying a zero balance it is my advice to not to close it. Closing a credit card account makes your credit limit to drop which further increases the balance to limit ratio. Reduction in the available credit limit makes your balance seemed higher to the credit scoring models which might impact it negatively even if temporary.

If you have a good credit score and want to improve it further closing a credit card account and applying for new ones will not help you in any way. Rather than applying for new credit card accounts you should ask your lender to increase the credit limit on your credit cards. This will increase the overall limit and decrease the balance to limit or the debt utilization ratio. A lender considers the increase in the limit for credit card only after you have displayed judicious usage and a good payment history.

Applying for credit in large number in a short period of time is treated as a sign of risk both by lenders and the credit scoring models. It may seem that you are trying to run yourself into a lot of debt in a short amount of time thus risking non-payment on the additional accounts. It is unclear as to how you will treat the additional debt and whether you will be able to manage it. In this case your credit score will get worse rather than better.

The best way to maintain and improve credit score is to pay all the bills on time and reduce the balances on your credit cards. A long history of good credit management reflects on your credit worthiness as a low risk consumer which reflects as higher credit scores.