9 Reasons Your Credit Limit Increase Request Was Denied
Ever wonder why your credit card company wont raise your credit limit? Here are some common reasons of why your credit limit increase request was denied, and what to do to increase the credit limit on your credit cards.
1. The account was recently past due
What it Means
You recently either missed a payment or made a late payment on your account. Generally, credit card companies don’t approve credit line increase requests on accounts that have a late payment within the last six to nine months.
What to Do
You may want to enroll in AutoPay or use customized alerts to help stay on top of your accounts. Pay your credit card bill on time and your chances of getting a limit increase gets much better.
2. The average balance on this account has been too low
What it Means
When a credit card company reviews requests for credit line increases, one of the things they look at is the payment history of your account. If you regularly use your card and make payments on time, it builds your account’s payment history. If you don’t use your card, theres little to no payment history to review.
What to Do
Use your card more, just make sure that you use your card responsibly. Be sure to pay on time and try to make more than just the minimum payments and keep your balance at a 20% utilization rate.
3. The account has not been open for at least 6 months
What it Means
The credit card company needs time to establish how the account has been used and its payment history. Once they have this information, it’s used as a guideline to help determine if the account qualifies for more credit.
What to Do
Feel free to request a credit line increase after your account has been open for at least six months.
4. The credit bureaus have reported a recent delinquency
What it Means
Your credit report shows you’ve recently paid one or more of your creditors late. Generally, credit card companies don’t approve requests for credit line increases on accounts that have had late payments withinin the last six to nine months.
What to Do
Make sure you are paying all of your creditors on time. If you have questions about what’s on your credit bureau report, contact the three bureaus: Equifax, Experian, and Transunion to resolve the issues or hire a company to do so on your behalf.
5. Your average monthly payment has been too low
What it Means
If you received this reason, it generally means you’re carrying a balance and not making large enough monthly payments to qualify for a credit line increase upon request. Both the payment history and the amount of your payments help us to determine if your account qualifies for a credit line increase.
What to Do
Manage your account responsibly. Be sure to make payments on time. In general, customers that make larger payments are more likely to be eligible for a credit line increase.
6. You recently exceeded the credit limit on your account
What it Means
You recently went over the credit limit on one of your credit card. Generally, credit card companies don’t approve credit line increase requests when one of a customer’s accounts has recently been over the limit.
What to Do
Check over your account information often to be sure that you’re not over your credit limit. Using the credit card companies’ customized alerts to tell you when your getting close to the credit limit makes a lot of sense.
7. Your outstanding debt is too high compared to your income
What it Means
When credit card companies review requests for credit line increases, they look at income and expenses. Your housing expenses and outstanding overall debt, as reported by the credit bureaus, might be too high for your income. Generally, credit card companies don’t approve credit line increase requests for customers that have high balances on revolving accounts.
What to Do
Pay down your credit card balances on all of your credit cards at or below 20% of your credit limits and if your employment status or income changes, be sure to contact your credit card company to update your information.
8. There are too many recent inquiries on your credit report
What it Means
According to the information reported by the credit bureaus, there have been numerous requests for new credit over the last 12 months.
What to Do
Keep in mind that when you make numerous applications for credit, it can lower your credit scores and affect how creditors evaluate credit line increase requests for your account. Be selective about how often you apply for credit. And if you don’t recognize any inquiries reporting to your credit reports, contact the three bureaus: Equifax, Experian, and Transunion to resolve the issues or hire a company to do so on your behalf.
9. Your current credit score is too low
What it Means
Based on the information reporting in your credit reports, your current credit score is too low to qualify for a credit line increase.
What to Do
– Pay your bills on time
– Keep your utilization rate at or below 20%
– Don’t close old accounts
– Establish a good mix of credit
– Limit your inquiries
– Get proactive and leverage consumer protection laws like the FCRA to remove derogatory information from your credit report or hire a credit repair agency like CreditFirm.Net to do so on your behalf.