If you are a credit card holder, proper credit management is crucial to you. It will help you maintain a healthy financial history. In addition, one way to improve your credit score is to increase your credit limit. Nevertheless, you should aim to do this without compromising your credit score.
In short, your credit score is nothing more than your credit profile. Once you choose a credit card based on your credit score, it becomes a part of your identity. How you repay your loan and make a consistent repayment expresses your role. Therefore, your credit score is nothing more than a proof of your integrity and character. This is why it is very important to increase your credit limit without compromising your credit score.
Understand credit limit increases
Increased credit limits are a fair way to reduce credit utilization, which is 30% of your credit score. Suppose you have a limited credit card ₹50,000, the outstanding amount is ₹20,000. Now raise the limit to ₹100,000 reduce your credit utilization from 40% to 20%, thus increasing your credit score.
How to ask for an increase in credit limit?
- Check eligibility: Make sure your income level is improved, your credit scores are consistent and in good condition. If you missed payments recently or have extremely high credit utilization, please do not ask for a raise.
- Talk to your issuer: If you request them in their application, website, or telephone customer service, your issuer will automatically increase your credit limit. Prepare to provide them with new revenue details.
- Request query type: Ask clearly whether the issuer will conduct hard or soft credit inquiries. A tough inquiry will temporarily lower your score, but a soft inquiry won’t hurt the score. So you need to understand the steps coming so you can make informed decisions.
How to avoid damaging your credit score?
- Don’t overspending: Keep an eye on your spending so that your credit utilization is low. Higher limits do not necessarily mean higher debt. The focus here needs to be on keeping credit utilization checks and as low as possible.
- Check your credit report: Make sure your report is free of errors and will not affect your credit score. You need to make sure your credit report is clean, consistent and represents a healthy credit profile. If there is a discrepancy, contact your credit bureau immediately and resolve the issue.
- Use credit responsibly: Pay consistently on time and keep credit consultation to a minimum. You should remember that credit is nothing more than borrowing money from the future. That’s why you’re always responsible for your money spending.
Therefore, you should focus on improving your credit score wisely by following the right approach.
By doing all of this and becoming a responsible credit user, all reasonable credit card consumers can enhance their financial position without damaging their credit scores. Always increase your priority on Smart Credit Management to get high credit limits.
