Make sure your credit is in good shape before requesting a credit limit increase with Credit One Bank.
When your Credit One Bank credit card arrived, it came with a credit limit based on your assessed creditworthiness from when you applied. If you’ve since used your credit card responsibly or boosted your income, you may qualify for a credit limit increase.
“Getting a credit limit increase will not hurt your credit score,” says Chuck Czajka, founder of Macro Money Concepts in Stuart, Florida.
In fact, an increase could even help your score, as long as you don’t use the higher limit to spend beyond your means. Credit One caters to customers with bad and less-than-perfect credit, so to those with credit challenges, a credit score increase is a welcomed result of this request.
Here’s what you need to know if you want a credit limit increase on your Credit One Bank card.
Who Is Eligible for a Credit Limit Increase With Credit One?
Issuers regularly evaluate borrowers for potential credit increases. In fact, if you’ve been a responsible credit card user or increased your income, Credit One may raise your credit limit for you. If Credit One hasn’t, you may need to reach out to the issuer to request an increase.
“You do not need a reason for increasing your credit limit, although there are many reasons you would ask,” Czajka says. For instance, “getting an increase may help you repair your credit or make large purchases more efficiently.” It can also help you consolidate your debt by allowing you to transfer a balance from a higher-interest-rate card to the one with the increased limit.
“You should have had the card for at least six months and have a good history of paying off your debt on time for both the credit card in question and other cards and loans you may have,” says Lisa Fischer, chief growth and lending officer at Mission Lane, which helps customers build credit.
Responsible use also applies to credit cards you have from other issuers. Credit One Bank evaluates your credit and payment history with it as well as with other creditors.
“You may also want to make your request around the time you receive a raise or additional income, so credit card companies have more evidence that you can handle increased expenses,” Fischer says. “On the flip side, you may want to hold off on requesting an increase if your credit is not where you want it to be, you have recently opened up another line of credit or if you’ve taken a pay cut.”
Credit card issuers also take the length and stability of your employment history into account when determining credit limit increases.
“It’s important that you only ask for a credit limit increase if you are confident you won’t overspend and you will use your credit responsibly,” Czajka says. “Receiving a credit limit increase means you’re able to spend more on your credit card at one time, which can be good for responsible users and potentially dangerous for those who do not pay their bill in full each month.”
What Should You Do Before You Request an Increase?
“Before requesting an increase, make sure your credit is in tiptop shape,” Fischer says. The best way to show that you are ready for a credit limit increase is to use your current cards responsibly. “Make all your payments on time and try to contribute more than the minimum payment if that is possible for your financial situation,” she says.
This applies to all of your credit accounts, not just the card on which you’d like an increase. Using your cards responsibly can help you maintain a low credit utilization ratio, or the percentage of your available credit that you’re using at a given time, which improves your chances of getting approved.
Issuers also look at your income, Czajka says. They’ll likely evaluate your debt-to-income ratio. If your debt is too high or you’re struggling to pay your obligations, getting approved for a credit increase is a lot harder, Czajka says.
If you’ve nearly maxed out all of your current cards, the bank may consider you a high-risk borrower and be less willing to give you a bigger line of credit.
“Additionally, avoid doing anything that might potentially lower your score, such as opening a new credit card or taking out a loan, or making a big purchase like a car or piece of furniture that lowers your available funds,” Fischer says. She also recommends taking a close look at your credit report to make sure everything is accurate. “Occasionally, there can be errors (on the report) that can take a long time to correct,” she says.
Skeff Bisset, managing partner at Bisset Financial Group, says to not place too much emphasis on your actual credit score. “Frequently the reporting agencies show you a number that can be higher than what is seen by the credit card and loan providers,” he says. “If you have a solid score with a good buffer you could feel comfortable applying.”
Ultimately, getting a credit line increase is about personal responsibility and consistency, Bisset adds. “Showing good behaviors and managing what you spend (and) do with your credit is key.”
How to Request a Credit Limit Increase With Credit One Bank
Credit One Bank automatically reviews your account for credit limit increase eligibility and lets you know as soon as you’re eligible for a higher credit line, but you can also request an increase by calling customer service at 877-825-3242.
Credit One cardholders who have rebounded from events that can hurt credit like bankruptcy, divorce or unemployment should make note of any changes to their finances. When requesting a credit line increase, have these updates to your personal financial information handy, including annual income, employment status and monthly rent or mortgage payments. The bank determines your debt-to-income ratio and evaluates your financial stability using this information.
Bisset tells consumers who are applying for a credit limit increase or a new credit card to ask their provider for a lower interest rate, too. “Believe it or not, they can negotiate with you on this.”
What to Do if Your Request Is Denied
“There are many reasons why banks deny people credit increases,” Czajka says. High balances, late payments in the previous 12 months, having too many credit cards or even applying to too many credit card companies can all be reasons for denying a credit limit increase request.
“I’ve seen credit card issuers send letters if you were denied because of information on your credit report,” he says. “Some companies will even give you an opportunity to correct this information and reapply.”
You can also contact the bank directly for more information on why you were denied. Credit One cardholders who are denied an increase may need to show improvement in paying on time or staying on top of their balance before taking on more responsibility.
“Consumers should always want to know as much about their financial picture as possible so they can make improvements where they can,” Fischer says. “This will help improve their chances of getting approved for increases in the future, as well as for other credit needs, such as a mortgage or installment loan. ”
Some common reasons include having a new account. The bank needs to see on-time payments for several months before you become eligible for an increase. Setting up autopay can help ensure you never miss a payment.
How Can a Credit Limit Increase Affect Your Finances?
Credit line increases can have a positive impact on your finances if you use the increase responsibly. “If your financial situation has improved, a credit limit increase means more buying power and a lower credit utilization that can lead to a better credit score,” says Abhi Chaudhary, general manager of direct-to-consumer products at Green Dot Corp., a banking services company. However, “if you’re in need of a lifeline, searching around for credit limit increases or taking on more and more debt might just contribute to a hole you can’t dig yourself out of.” Before asking for a credit line increase, weigh the pros and cons.
Increase flexibility. A higher credit limit allows you to buy more on credit, which can help you take advantage of credit card rewards.
Pay off higher-interest debt. You may be able to transfer higher-interest credit card balances to your card after a credit limit increase, allowing you to consolidate your debt and lower its overall cost.
Improve your credit score. Increasing your credit limit can improve your credit score by lowering your credit utilization rate, as long as you don’t overspend on your new limit.
Increased spending. Being able to spend more doesn’t necessarily mean you should spend more. If your income can’t cover your spending, an increase may be a bad idea.
More interest charges. If you spend more and can’t pay your bill on time each month, you could end up paying even more in interest charges over time.