Capital One has some rules when it comes to credit limit increases -- make sure you know them before you request one. Image source: Getty Images.
Increasing the credit limit on your Capital One credit card can be a great way to add more flexibility to your budget and possibly increase your score. Capital One does allow credit limit increases, but only to eligible cardholders. Luckily, even folks with an average credit score may qualify for a high credit limit.
Find out whether or not you're eligible for a credit limit increase with Capital One, how often you can request a credit limit increase, and how it will affect your credit score.
Does a credit limit increase affect your credit score?
Increasing your credit limit or getting a good high limit credit card can be a good way to increase your credit score, but it doesn't always work that way. There are two factors at play here: your debt-to-credit ratio, and your recent inquiries.
Your debt-to-credit ratio, also known as your credit utilization rate, is the ratio of debt you have to your available credit. This is calculated across all accounts and on each individual account. If you have a balance of $3,000 across all of your credit cards and a total available credit (the credit limits of all your credit cards added up) of $10,000, your credit utilization rate is 30%. This is a good credit utilization rate.
This number is a major factor in calculating your "Amounts Owed," which makes up 30% of your FICO Score®. The general rule of thumb is to keep this number below 30%, although there are no official published guidelines. We do know that a lower credit utilization rate is always better. Keep in mind that this number is updated continually, so if you tend to bump up against your credit limit each month, using all of your available credit could still be hurting your score even if you pay off your balance in full each month.
Featured offer: save money while you pay off debt with one of these top-rated balance transfer credit cards
"New Credit" is a category that makes up 10% of your FICO Score®, and a major factor in calculating this number is the amount of recent inquiries you have on your account. Each time a lender pulls your credit report, it results in an inquiry. If it's a soft inquiry, it won't affect your credit score. If it's a hard inquiry, it will show up on your credit history and could decrease your score slightly and temporarily. Some lenders process credit limit increase requests as a soft inquiry and some process them as a hard inquiry. One or two hard inquiries won't make a noticeable dent, but having a lot in the past year can hurt your credit score.
Overall, requesting too many credit limit increases in a short period of time can drag down your score, and if you're denied, it will do nothing to help your score. However, if you're approved for a credit limit increase, your credit utilization rate will decrease, which will likely more than offset any dip caused by an inquiry. The takeaway here is that requesting a credit limit increase can boost your credit score, but it's important to make sure you're eligible before applying in order to minimize the chances of a rejection.
When should you ask for a credit limit increase?
Given the information above about how a credit limit increase can affect your credit score, you should only request to have your credit limit increased if you meet the following circ*mstances:
- You're eligible according to the rules of your credit card issuers AND
- You're currently using a significant portion of your available credit on a regular basis OR
- You plan to close a credit card in the near future
If your credit utilization rate stays below 10% each month, there isn't much reason to request a credit limit increase. However, if you plan to close a credit card in the near future, you might want to request a credit limit increase on a credit card you plan to leave open in order to offset the available credit you'll lose by closing a card.
What you need to know about requesting a credit limit increase from Capital One
Now that you understand how credit limit increases affect your credit score and when you should request one, it's time to get into the details of how credit limit increases work with Capital One.
How often can I get a credit limit increase from Capital One?
Capital One lets you request a credit limit increase online as often as you want, but you can only be approved once every six months. If you've received a credit limit increase or a credit limit decrease in the last six months, you won't be approved for a credit limit increase.
Additionally, if your account is less than three months old, you won't qualify for a credit limit increase. Even if your account is older than three months, you still might be denied for having a new account. People with accounts that are at least 12 months old have the best chance at receiving approval.
Does a credit limit increase with Capital One result in a hard pull?
The good news is requests for a credit limit increase with Capital One are processed as a soft inquiry, meaning they won't damage your credit score.
Eligibility requirements for a credit limit increase with Capital One
In order to qualify for a credit limit increase with Capital One, your account needs to meet the following requirements:
- It must be at least three months old.
- You can't have received an increase or decrease in your credit limit within the past six months.
- Your account must be unsecured (in other words, secured credit cards don't qualify).
Of course, meeting these qualification requirements doesn't guarantee that you'll be approved for a credit limit increase. Here are the factors that Capital One considers when deciding whether or not to grant you a credit limit increase.
- On-time payments
- The amount of your monthly payments
- Your credit score
- How much credit you use -- if you rarely use your credit card, your chances of approval are lower
They will likely also consider your disposable income and employment status in relation to the amount of credit you have available. Banks don't like to extend more credit to you than they think you can handle.
How to increase your chances of approval for a credit limit increase with Capital One
According to Capital One, there are a number of steps you can take to increase your chances of approval for a higher credit line in the future. Of course, even if you follow all of these steps, you are never guaranteed to receive approval.
- Pay your bills every month on time.
- Make more than your monthly minimum payment. Ideally, you should be paying off your balance in full each month.
- Make sure all of your accounts, whether with Capital One or another bank, remain in good standing.
- Update your employment and income information regularly.
- Use your Capital One credit card often. If you only charge $30 to your credit card each month, your chances of approval for a credit limit increase are lower.
How to request a credit limit increase from Capital One
The process of requesting a credit limit increase with Capital One is quick and easy, and everything can be done completely online. The following steps explain the process.
- Log into your Capital One account and click on Services. Click on Request Credit Line Increase.
- Fill out the request form. It will ask for the following information: annual income, employment status, monthly mortgage/rent payment, and monthly spend with credit cards.
- Submit your request.
You may receive an immediate decision, but more than likely, you'll be sent to a "Request Received" page. You'll get a decision within two to three business days if you have a paperless account or 10 days by mail.
Requesting a credit limit increase by phone
If you'd prefer to call Capital One and request a credit limit increase that way, you can give them a call at 1-800-955-7070. You'll be able to submit your request through an automated response, so you don't have to speak to a customer service representative.
Remember that while increasing your credit line can help your credit score, having more available credit can also do serious damage to your credit score if you don't use it responsibly. Maintaining an excellent credit score will help you qualify for some of the best credit cards on the market. Make sure you always make on-time monthly payments and pay off your balance in full whenever possible to avoid interest charges.
Alert: highest cash back card we've seen now has 0% intro APR until 2025
If you're using thewrong credit or debit card, it could be costing you serious money.Our experts love this top pick,which featuresa0% intro APRfor 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.
In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.
Readour free review
As an enthusiast deeply entrenched in the realm of personal finance and credit management, I bring a wealth of knowledge and experience to shed light on the intricacies of credit limit increases, particularly with Capital One. My understanding goes beyond the surface level, delving into the nuances of credit scoring and the impact of financial decisions on one's creditworthiness.
Let's break down the key concepts embedded in the article:
1. Credit Limit Increase Impact on Credit Score:
- Increasing your credit limit can enhance flexibility and potentially boost your credit score.
- Two critical factors at play are the debt-to-credit ratio (credit utilization rate) and recent inquiries.
- Debt-to-credit ratio influences the "Amounts Owed" category, constituting 30% of your FICO Score.
- Maintaining a lower credit utilization rate is advisable, ideally below 30%, to positively impact your score.
- "New Credit" is a category contributing 10% to your FICO Score, where recent inquiries matter.
- Too many hard inquiries in a short period can temporarily lower your credit score.
2. When to Request a Credit Limit Increase:
- Request a credit limit increase if you are eligible, regularly use a significant portion of your available credit, or plan to close a credit card.
- A credit utilization rate below 10% might not necessitate a request, but closing a card could prompt an increase elsewhere.
3. Capital One's Credit Limit Increase Policies:
- Capital One allows online requests for a credit limit increase as often as desired but approves only once every six months.
- Accounts must be at least three months old to qualify, and those less than three months old or with recent limit changes are ineligible.
- Unsecured accounts, not secured credit cards, are eligible.
4. Impact on Credit Score - Soft vs. Hard Inquiry:
- Credit limit increase requests with Capital One result in a soft inquiry, preserving your credit score.
5. Eligibility Requirements for a Credit Limit Increase with Capital One:
- The account must be at least three months old.
- No credit limit changes (increase or decrease) within the last six months.
- Unsecured accounts qualify.
6. Factors Considered by Capital One for Approval:
- On-time payments, monthly payment amounts, and credit score.
- Credit utilization and how frequently you use your credit card.
- Consideration of disposable income and employment status relative to available credit.
7. Tips to Increase Approval Chances:
- Pay bills on time, exceed minimum payments, and maintain accounts in good standing.
- Regularly update employment and income information.
- Actively use your Capital One credit card.
8. Requesting a Credit Limit Increase with Capital One:
- Process can be done online through the Capital One account.
- Provide information on annual income, employment status, monthly mortgage/rent payment, and monthly credit card spend.
- Decision may be immediate or take two to three business days for paperless accounts.
9. Requesting a Credit Limit Increase by Phone:
- Call Capital One at 1-800-955-7070 to submit a request via an automated response.
10. Caution on Responsible Credit Use:
- Emphasizes that while a higher credit line can help your credit score, irresponsible use can harm it.
- Maintaining an excellent credit score facilitates qualification for premium credit cards.
In conclusion, understanding these concepts and intricacies is crucial for anyone navigating the landscape of credit limit increases, especially with Capital One. Requesting an increase can be a strategic move, but it should be approached with knowledge and caution to ensure positive outcomes for one's credit profile.
