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Does Increasing your Credit Limit Affect your Credit score?

Whether you’ve been offered a credit limit increase or you’re looking to request one, it’s important to consider exactly what that means for you—and your credit score.

25 July 2022Tassie Milne 3 min read
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Image by David Marcu on Unsplash

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If you’re realizing the $1,500 credit limit on your credit card may be stopping you from being able to pay that last minute car repair or an emergency part for your washing machine, it may be time to consider a credit limit increase.

Although it might feel a little daunting to think about having more access to more funds, having the option for more credit may not always be a bad thing. But how do you go about getting that?

Whether you’ve been offered a credit limit increase or you’re looking to request one, it’s important to consider exactly what that means for you—and your credit score.

Credit scores can be confusing. In between credit cards, paying bills, and understanding what affects it positively or negatively, it’s no surprise there’s a lot to take in. But will increasing that credit limit negatively affect your score overall?

We’re here to help answer that.

If you consider yourself not just a big spender, but a good spender—a.k.a. you pay your credit bills on time or even in full—there are generally two ways you can get a credit limit increase:

  1. Your lender (i.e. your bank or credit card company) may offer you an increase, which you can choose to accept and approve. Generally, lenders will often offer this if you’re in good standing when it comes to your credit history, as well as how long your credit has been open.
  2. You can request a credit limit increase yourself. But to do this, lenders will most likely ask you to provide your income, employment status, or even a monthly mortgage or rent payment. Based on this information and your history, they then can choose whether they increase your credit limit, or keep it as is.

Technically, it can—and it all depends on whether your lender pulls a hard inquiry of your credit score report, to see if your request can be approved.

Often times, when a hard check or inquiry is performed on your credit score, this can sometimes decrease your score—given that a part of your score is calculated based on how often you’ve applied for credit.

If you’re unsure if you should request an increase, you can always ask prior to putting in the request, to see if they will be performing a hard inquiry.

At the end of the day, it’s really dependent on your needs for your finances. However, a couple things to consider are:


Timing is everything and if you recently increased your income, decreased your debt, or improved your credit score—it may be a good time to consider getting a credit limit increase. However, on the flip side, if you lost your job, had your income cut, your credit score has gone down, or you’re almost at your max credit limit, it is definitely not a good time to be adding new credit to your accounts.

2.Your Credit Background:

If you’ve been responsible with your credit and you’ve been making payments on-time for six to 12 months, and they’re more than the minimum requirement, you could be eligible for an increase. As always, if you’ve kept your credit utilization ratio below 30%, you’re in a much better standing to be approved for a credit limit increase.

3. The Last Time You Increased Your Credit:

As mentioned, every time you try to increase your credit, you can negatively affect your credit score. And, if you ask too many times, some lenders may see this as a red flag and that you’re about to go on a spending spree. With credit limit increases being given based on a hard inquiry of a credit report, it’s important to space out your requests to keep your credit score in good standing.

While credit limit increase requests made by you can sometimes involve hard inquiry by your lender, if your lender offers you an increase instead, chances are your credit wasn’t accessed in a way that will hurt your credit score.

However, if you’re known to overspend with more access to funds, you might want to think twice about giving yourself access to more.

While it might seem like a credit limit increase could negatively impact your credit score—more money, maybe more problems—it can actually do the opposite, if you’re responsible with your spending habits. By keeping your spending habit the same prior to the increase, and by making your payments in time, and preferably in full, your credit score won’t just be negatively impacted, it could also increase too.

That’s in part thanks to your credit utilization.

Credit utilization—the amount of your credit that you’re using—is a huge factor when it comes to your credit score. Overall, it’s beneficial to keep your credit ratio at 30%--if you have a $10,000 credit limit on your credit card, for example, it’s best to keep it at $3,000 or less. That’s why, if you keep your spending habits the same, a higher credit limit can lower your overall credit utilization ratio because you’d be spending even less than $15,000 for example. As long as you pay your bills on-time, you’re on track to actually positively affect your credit score.

But, as always, you will need to consider what the impact of having access to more credit would mean for you. It could mean more spending and therefore higher balances and monthly payments which might become a struggle to repay. Always stop to consider if a credit limit increase is right for you.

And, if you need a bit more help before making a financial decision like this, you can also do a soft check of your credit score—for free and within minutes—with ClearScore.

Tassie Milne Image

Written by Tassie Milne

General Manager - ClearScore Canada

Tassie heads up ClearScore Canada. She lives in Toronto with her husband and two young boys. In her free time, she can be found at the family lake house or playing ball hockey.