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I just got a new job and a mortgage last month. I am now being paid significantly more than I was previously. I have two credit cards that I have always paid off on time, and my score is around 750. I would like an increase on my credit limit, one that would put my total debts at 15% of my income. I have eight hard inquiries (from banks I use for credit/brokerage/etc) in the past two years. I have tried to increase one of my cards twice in the past two years, but it has gotten denied because I wasn't making enough money. I would like a credit increase on the other card (haven't tried to get it increased before). How long should I wait before asking for an increase?

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I'm not sure what raising your credit limit would do to your score in the short term. I don't think it's a clear win, though. Your percent utilization will go down (more available credit for the same amount of debt) but your available credit will also go up, which may be a negative, since potentially you can default on more debt.

If you're interested in monitoring your score, Credit Karma will let you do that for free.

  • I would like to have more credit available because I have more bills to put on my card, and in case I need to make a large purchase in the future. Doing those currently would put me pretty close to my limit, so I'm looking to drop my utilization percentage. – user9502 Mar 12 '13 at 6:12
  • One quibble, I'm pretty sure lower utilization and higher available credit are both good things in the formula. – Sean W. Mar 12 '13 at 20:37
  • @SeanW. I did a few searches and there seems to be a sweet spot. Too low of a limit and your utilization looks high. Too high of a limit and you might be perceived as on the verge of getting into trouble. – mbhunter Mar 12 '13 at 21:34
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8 hard inquiries spread over two years is not a negative factor, with a score of 750.

Real question #1: How much of your credit limits are you currently using? Less than 30% of your credit limits is good. Less than 15% is even better, 10% is great

You don't need to wait X amount of days after applying for a mortgage or a card to increase your chances of getting approved for something else. You do need to be conscious of how many hard pulls you have done in a reporting period though, but again as I said, 8 spread over two years is not a whole lot.

Real question #2: What negative things do you have in your credit history? Young age, income, delinquent payments, bankruptcies, low limits?

Some of these negative factors are catch-22's (low limits, young age = low limits because of age and young credit history) but these contribute to how much institutions would be willing to lend you

  • I'm young, and have only had credit for two years. I almost always use less than 30% of my credit limit. It was less than 10% for a while, but I've had to make some larger purchases in the past few months. No delinquencies or any negative behaviors, just a relatively short credit history. My current total credit on both my cards adds to a few thousand. I was looking to more than double the limit on my card. Is that too much to ask in one go? – user9502 Mar 12 '13 at 6:10
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Specific to the inquiries, from my Impact of Credit Inquiries article -

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8 is at the high end pulling your score down until some time passes. As MB stated, long term expanding your credit will help, but short term, it's a bit of a hit.

  • I've already gotten a mortgage, and I'm not looking to get any new debt (car loan, etc) for the next year or two. Just want to increase my credit limit to give me some wiggle room and decrease my utilization percentage. – user9502 Mar 12 '13 at 6:13
  • Understood. In two years, you'll be at zero, short term hit for long term gain. – JoeTaxpayer Mar 12 '13 at 13:01
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My recommendation is to not ask for a credit increase, but just increase the utilization of one card if you have multiple cards, and decrease the utilization of the others, and continue paying off all cards in full each month. In a few months, you will likely be offered a credit increase by the card that is getting increased use. The card company that is getting the extra business knows that you are paying off big bills each month and keeping your account in good standing, and they will likely offer you a credit increase all by themselves because they want to keep your business. If no offer is forthcoming, you can call the card company and ask for a credit increase. If they refuse, tell them that you will be charging very little on the card in the future (or even canceling your card, though that will cause a hit on your credit score) because of their refusal, and switch your high volume to a different card.

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