There are a number of reasons you may want a higher spending limit. If the reason is so you can “buy more stuff,” you should probably reassess your life situation before you continue reading. Perhaps you should look at ways of making more cash, budgeting and saving before jumping into the dangerous world of credit.
However, if you want to increase your credit to appear more desirable to mortgage lenders, to appear as though you’re using less of your overall credit, to boost your credit score or to have an adequate fail-safe in the event of an emergency, then read on!
To get more credit, you need to ask yourself, “How does a responsible borrower use money?” In a nutshell, a responsible borrower only takes what he or she needs and promptly repays what has been borrowed – in full – in the promised amount of time. A responsible borrower acts predictably and plans ahead when it comes to finances. These traits demonstrate your credit worthiness to lenders.
How to Prove Credit Worthiness to Lenders
Lenders will look at your credit history, your credit score and your behavioral patterns when they’re deciding whether or not you can be trusted with more money. You’ll find that creditors are pretty generous when it comes to upping your limit, as long as you’ve demonstrated your credit worthiness in the following Federal Reserve Board recommended ways.
Rule # 1: Stay Within Your Spending Limits
Lenders see a huge red flag when you spend more than the credit limit listed on your statement. Not only will you suffer the credit card company’s fees, but you may also see an increase in interest rates across the board, a drop in your credit score and you probably will not be seeing a credit increase anytime in the near future. Staying within your allotted spending limit shows that you know how much you’re allowed to borrow and that you can budget accordingly to spread that money out across all your needs.
Rule # 2: Use Your Cards
When you don’t use your cards for long periods of time, lenders feel uneasy because they have no way of tracking your spending patterns and behavior. If you use your card regularly and responsibly, the creditors will be less reluctant to offer you more money.
Rule # 3: Pay It Off
Sure, your credit card statement says you only have to pay $30 each month, even though your balance is $300. While it’s fine for keeping your credit score up, when creditors see you just making the minimum monthly payments, they wonder why you’re unable to pay it all off and therefore assume you can barely manage the credit amount you’ve been offered. By paying your balance in full, they see that you have plenty of money to cover all your purchases – and could probably even use your card even more if they’d allow it.
Ways to Keep Your Lenders Happy
-Always pay your bill early or on time
-Always pay your balance in full
-Use your card regularly
-Never exceed your credit limit
-Take steps to increase your credit score
-Read all information they send you regarding your account
-Do not cancel your cards or switch constantly to 0% interest cards
-Make sure your lender is aware of your income and that it’s accurately listed on your credit report
-Call your lender or visit the lender’s website to request an increase
Related posts:
- Credit Scores – Damaged Credit Score Quick Fixes
- 4 Tips To Increase Your Credit Score
- Identifying the different types of debt
- Finding answers about credit card limits
- Understanding Credit Card Balance Transfer Offers
FAQ: How do I check my Free Credit Report?
Your credit report is the basis for your financial standing. No matter how slick or smart you may be, no bank will touch anyone with a low credit score. It's their money, why would they want to take a bigger risk than they need to?
If you don't know where your credit report score is at, now's the time to take a peek. Don't get surprised with a low credit score when you go in to review your report with a potential lender or even an employer, find out for yourself within minutes.
