If you need a loan or a new credit card, new and existing creditors will be looking towards your old credit history to see how you have managed your credit in the past. Even though there is supposedly a recession on, credit card companies will still want to weigh up the risk between lending more money to reliable customers, and marking out those who could be a potential non payer in the future. To keep yourself in the game and to make sure that you are in the best possible situation to be able to increase your credit limit, should you need to, follow our tips.
Never exceed your existing Credit Limit
Always make sure you are well within your credit limit, this shows you are in control of your spending and a reliable customer. So, when you check your statement, your available spend is the amount left on your card and the current balance is what you owe to the credit card. If you find you are getting close to your credit limit, try making more than the minimum payment as you have to make allowance for transactions such as interest, fees, a repayment option plan etc which all could be added to your account and send you over your credit limit without you realising it.
Make your payments on time – every time
Make sure that your payments are made in time to reach your account without you going over your credit limit. By keeping your account in good order, again you are showing that you are a responsible customer and can handle the monthly repayments with no problem. So keep track of all your monthly spending by writing down your outgoings and deduct this from what you have coming in. This gives you your budget for the month and you can then decide how much you wish to pay off your credit card.
Make use of your existing Credit Limit
It may sound like a no brainer but if you have a credit card then use it! There’s absolutely no reason to own a credit card if you are not going to put it to use and in fact, it looks worse if you do not use it frequently. A frequent credit card user who then pays off their balance over a few months is showing to their lender that they are capable of owing money and then repaying it back. This means that the lender is more likely to raise their credit limit, once they have seen this happen two or three times. They are not likely to raise your credit if you do not use your card. This is because you are not creating positive information for credit reference agencies about how you manage your credit.
Don’t take on too much Credit
If you find that once you have worked out your budget, your outgoings are more than what you have coming in, you’ll need to readjust your spending and this means either by reducing what you spend or increasing your income. It may mean that for a while you are only paying off the minimum amount until your circumstances improve, but this is not a good time to be asking for more credit. Try and reduce the balance as much as you can before you do this. As the criteria that banks and credit cards now use for determining who they lend to has changed, they are being much more responsible and they will not give you more credit than they think you can handle. So it is very likely that they will look at your current spending, your average repayments and check to see whether you are already over indebted, in their minds.