Credit limits have a great effect on your credit scores.
The system of Revolving Utilization comes into effect here.
Let me explain how your credit limit can alter your credit score.
Assume that you have 10 credit cards with a limit of $500 each.
Your total credit limit comes out to be $5000.
Incase you have already used $ 2500 out of your limit, and then you just have 50 percent of your limit available for you.
Now lenders and credit score agencies will evaluate your score on the basis of the ratio between your total limit and the available amount.
In such a case you can just pick a phone and call the credit bureaus requesting them from an increase in your credit limits, which is not a big deal for them.
If they increase your limits to double, the available balance for you comes out to be $5000 again.
You can simply reduce the credit to available balance ratio from 50 % to 33 %.
More over calling these agencies is also free as they have toll free numbers.
So you have just increased your credit score but just making few free calls.
Not a bad deal.
Control Your Expences: Credit available increase request can give way to inquiries and these inquiries also reduce your credit score, so you must go for a limit increase within 14 days.
The 14 day period theory works very well as the credit score evaluating agencies do not know why the third party is enquiring your credit.
All inquiries with 14 days are grouped and considered as one and wont be costing any extra enquiry into the account.
Another great advice is not to use the increased amount lavishly.
Once you get the credit limit increased doest mean that you start spending it.
In fact you have to preserve it in order to maintain a balance between your spent and available limit.
This strategy can be easily used every six months.
Another thing you need to do is make sure, absolutely sure that you pay your existing bills on time.
Some studies show that you get additional credit if you pay more than just the minimum amount due, but in any event, make sure you pay it on time.
If you are mailing a payment, mail it at least a week before the due date to ensure that it gets posted to your account on or before the actual due date.
Another helpful thing is Debt consolidation.
You can consolidate various debts with one agency paying them off for you.
Now you have to pay the money back to the single agency rather than a number of companies or individuals.
The system of Revolving Utilization comes into effect here.
Let me explain how your credit limit can alter your credit score.
Assume that you have 10 credit cards with a limit of $500 each.
Your total credit limit comes out to be $5000.
Incase you have already used $ 2500 out of your limit, and then you just have 50 percent of your limit available for you.
Now lenders and credit score agencies will evaluate your score on the basis of the ratio between your total limit and the available amount.
In such a case you can just pick a phone and call the credit bureaus requesting them from an increase in your credit limits, which is not a big deal for them.
If they increase your limits to double, the available balance for you comes out to be $5000 again.
You can simply reduce the credit to available balance ratio from 50 % to 33 %.
More over calling these agencies is also free as they have toll free numbers.
So you have just increased your credit score but just making few free calls.
Not a bad deal.
Control Your Expences: Credit available increase request can give way to inquiries and these inquiries also reduce your credit score, so you must go for a limit increase within 14 days.
The 14 day period theory works very well as the credit score evaluating agencies do not know why the third party is enquiring your credit.
All inquiries with 14 days are grouped and considered as one and wont be costing any extra enquiry into the account.
Another great advice is not to use the increased amount lavishly.
Once you get the credit limit increased doest mean that you start spending it.
In fact you have to preserve it in order to maintain a balance between your spent and available limit.
This strategy can be easily used every six months.
Another thing you need to do is make sure, absolutely sure that you pay your existing bills on time.
Some studies show that you get additional credit if you pay more than just the minimum amount due, but in any event, make sure you pay it on time.
If you are mailing a payment, mail it at least a week before the due date to ensure that it gets posted to your account on or before the actual due date.
Another helpful thing is Debt consolidation.
You can consolidate various debts with one agency paying them off for you.
Now you have to pay the money back to the single agency rather than a number of companies or individuals.
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