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Bottom Line Up Front

  • Raising your credit limit can improve your credit utilization ratio, provided you don’t increase your spending too much.
  • Card issuers will look at several factors when considering a limit increase request, including your payment history, your current income and the age and standing of your account.

Time to Read

4 minutes

May 12, 2022

Do you know what your total revolving credit limit is? What about the limit for each of your credit cards? Whether you’re approaching your credit limit now, you barely ever come close, or you’re looking to secure a new line of credit, it’s important to know where you stand. The percentage of revolving credit you have available can impact your credit score, for better or worse, especially when stacked up against the balance you carry. That ratio is known as your credit utilization. 

Let’s define some of those terms before we dig into the finer details. 

What is a credit limit?  

When you’re approved for a credit card, you’ll be given a credit limit. That limit represents how much money you can borrow. When you’re not carrying a balance on your credit card, your credit limit and available credit will be the same. When you're carrying a balance, your available credit will be your credit limit minus your balance. 

Your credit card issuer may request your score from the various credit bureaus, including Equifax®, Experian® and TransUnion®, when determining your creditworthiness.

What is credit utilization?  

It’s easy to pull out your credit card and swipe it when you want something. And, if you make the monthly payments and pay your credit card debt off each cycle, your credit likely won’t be negatively affected. However, if you keep a balance on one or more cards, this can reduce your credit score due to having a high credit utilization ratio. 

Credit utilization is the sum of the debt you have on all your revolving credit—your credit cards and lines of credit—divided by your limit. Experts recommend keeping your credit utilization below 30%, but lower is better since it’s an influential part of calculating your credit score. (You can monitor your line of credit and credit card usage, including minimum payment and balance, with your Navy Federal online account.)

When should I investigate increasing my credit limit? 

There are several reasons you may want to consider asking for a new card or line of credit with a higher credit limit. Try timing your request for when:


  • your credit has improved. If you see your credit has improved after reviewing your latest credit report, contact your creditor for an increase. 
  • you want your credit to improve. Increasing your credit limit may reduce your credit utilization ratio and can increase your credit score. For example, a balance of $300 with a $1,000 credit limit means you’re utilizing 30% of your credit. If you’re approved for a credit limit increase to $2,000, your credit utilization is instantly halved to 15%, provided you don’t increase your balance.
  • you need to buy a big-ticket item. Should you need to cover a larger expense, a credit limit increase can be helpful. If you have good credit and make payments on time, your creditor may approve an increase in the amount of credit available to you.

How is a credit limit increase approved? 

When you ask for a credit limit increase, the credit card company may make a credit inquiry and look at factors like the following:


  • Credit account age and standing 
  • Time since last additional credit request
  • Annual income
  • Employment status
  • Payment history

Be realistic when looking at your financial situation and understand your creditworthiness in order to increase your chance of approval. 

Things to Consider When Requesting a Credit Limit Increase 

  • New credit could cause a temporary drop in your credit score. Although an increase in your credit limit may help your credit score, a lender’s “hard inquiry” will be added to your credit history and could lower your score in the short term. This is especially true if you’ve applied for credit increases multiple times or with multiple lenders in a relatively short period of time. 
  • Make sure your new credit balance won’t lead you to temptation. When you make a credit limit increase request, be careful to not overspend. Late payments and not keeping your utilization rate low could cause long-term problems.

Understand Your Credit

Navy Federal can help you take control of your credit and even suggest the best credit card for you. Read up on everything you need to know about credit scores, as well as myths that can drag down your credit. Monitor your credit score through the Mission: Credit Confidence® Dashboard and get alerts whenever there is a change.

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This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.