Personal Finance

Requesting a credit limit increase bad for your credit score?

  • Last Updated:
  • Aug 17th, 2010 2:26 pm
Tags:
None
Deal Addict
Jul 28, 2009
1073 posts
179 upvotes

Requesting a credit limit increase bad for your credit score?

So, I'm a 20 year old college student, I have a full time job paying $40k/yr , own my own condo and car. I was wondering if asking for a credit limit increase is bad for your credit score?

Well, today I decided to just go ahead and ask MBNA for an increase on my Smart Cash credit card (my only card), and they immediately said they'd up it from $1500 to $2500. Only looked at my credit report for like 1.5 minutes.

So, now my question is, is this a good or bad thing for my credit score? I have never missed a payment either.
13 replies
Sr. Member
May 8, 2008
779 posts
11 upvotes
I don't see why it would be bad for your credit score, it's only if you don't pay the full balance on time. Normally I get an increase without asking but I have asked for a increase on both my Visa and line of credit and it hasn't impacted my credit score to my knowledge.
Deal Addict
May 31, 2007
3036 posts
195 upvotes
Your credit score has taken a hard hit from the credit limit increase inquiry which reduces it like 10-25 points.

Now you have more available credit, which should increase your score, if you don't use it.

Your score will come back in a couple months; just don't ever miss a payment or rack your card to the limit and hold it there.
Deal Fanatic
User avatar
Nov 23, 2005
7737 posts
3647 upvotes
This has been discussed before, but here you go again.

If your account is automatically qualified for a CLI, it will have "no" impact on your credit bureau.

If your account has to be "reviewed", then a soft inquiry will be done on your credit bureau.
[OP]
Deal Addict
Jul 28, 2009
1073 posts
179 upvotes
Jungle wrote:
Aug 16th, 2010 11:04 pm
Your credit score has taken a hard hit from the credit limit increase inquiry which reduces it like 10-25 points.

Now you have more available credit, which should increase your score, if you don't use it.

Your score will come back in a couple months; just don't ever miss a payment or rack your card to the limit and hold it there.
So, i just took a hit but now my credit score will increase faster than before?
Deal Addict
May 31, 2007
3036 posts
195 upvotes
boyoflondon wrote:
Aug 16th, 2010 11:10 pm
This has been discussed before, but here you go again.

If your account is automatically qualified for a CLI, it will have "no" impact on your credit bureau.

If your account has to be "reviewed", then a soft inquiry will be done on your credit bureau.
I thought the GOV stopped the automatic CLI?
Also MBNA has told me an increase inquiry on my 0% CC would result in a hard hit. Soft hits were used for marketing and targeting customer's with promotions.
Deal Addict
May 31, 2007
3036 posts
195 upvotes
PunPryde wrote:
Aug 16th, 2010 11:14 pm
So, i just took a hit but now my credit score will increase faster than before?
Well, it should balance back within a couple months. One hit does not affect your score a lot. Missing a payment will kill it.
Moderator
User avatar
Mar 23, 2004
33104 posts
2104 upvotes
Markham
Jungle wrote:
Aug 16th, 2010 11:14 pm
I thought the GOV stopped the automatic CLI?
they did, but the card company can tell u that u are qualify for it and raise it with your permission.
「もし、奇跡を起こせたら……」
Sr. Member
May 8, 2008
779 posts
11 upvotes
Jungle wrote:
Aug 16th, 2010 11:04 pm
Your credit score has taken a hard hit from the credit limit increase inquiry which reduces it like 10-25 points.

Now you have more available credit, which should increase your score, if you don't use it.

Your score will come back in a couple months; just don't ever miss a payment or rack your card to the limit and hold it there.
Do you have a source for this? I don't think it's correct, especially if they didn't do a "hard" check as he said it was approved a couple of minutes.
Deal Addict
May 31, 2007
3036 posts
195 upvotes
oceania wrote:
Aug 16th, 2010 11:30 pm
Do you have a source for this?
I'll quote my previous post again for you:

jungle wrote:Also MBNA has told me an increase inquiry on my 0% CC would result in a hard hit. Soft hits were used for marketing and targeting customer's with promotions.
Also for your information, I once had a $10,000 limit MBNA PLAT PLUS card. I split it into three other cards: Smartcash, Optimum and SonyMastercard.
They would not allow my grand total limits from these four cards to go over my initial $10,000, without a hard hit on my credit rating.

In addition, ( I am really board right now), I just called MBNA and spoke with Account Manager "Tiffany", she confirmed that a credit limit increase will result in a hard hit.
oceania wrote:I don't think it's correct, especially if they didn't do a "hard" check
That is your assumption. It was never stated what kind of check it was.
oceania wrote:as he said it was approved a couple of minutes.
More then likely they got their data, credit score and plugged in their formulas, then came out with the allowed limit raise. :D
Deal Expert
May 30, 2005
37801 posts
796 upvotes
Richmond Hill
I can also confirm that I was told a request results in a hard hit. Since I didn't need the increase badly, I said no. :P
Check out my BST Threads!Silver Coins
Heatware | RFD Feedback
Moderator
User avatar
Mar 23, 2004
33104 posts
2104 upvotes
Markham
yes it will, but who cares anyway as long as u are not lookign to get a huge loan/mortgage soon.
「もし、奇跡を起こせたら……」
Deal Addict
User avatar
Aug 12, 2007
1823 posts
1 upvote
Conquistador wrote:
Aug 17th, 2010 10:46 am
OH NO! Not a hard hit!

Oh the humanity.... :eek:
+1 What do people think a hard hit will do? A hard inquiry will not affect your credit situation. You will not be denied credit or pay higher interest rates because you applied for credit. How else are you going to get credit, if you don't apply?

Now, you should avoid several credit inquiries over a short period, if possible. Multiple hits over a short period cause a bigger concern on your credit profile for potential lenders, however, if you are not about to apply for a car loan or something like that, then it is not big deal. If you want a new credit card or higher limits, then you'll have to apply. Big deal! People's credit scores are usually in the range of 650 to 800, and they fluctuate weekly, or even daily. Do you think a credit inquiry causing a 10 point dip will actually make a difference in the long term, or even the short term?

People need to get some perspective when it comes to credit scores and credit reports. They are only a tool. We should not be obsessed with them. As long as you have a few lines of credit, and have paid them off on time, you'll be fine. If you keep your debt ratios low, then so much the better.

If you have bad credit (I did), then keep plugging away at your payments, and eventually your credit score will improve. Apply for new credit as your history improves and use all your lines frequently.

That's it. Please stop worrying about what each "hit" will do to your credit score.
× < >

Top