How can you increase your credit limit without hurting your CIBIL score?
credit score by lowering your credit utilisation ratio (CUR). This ratio refers to the percentage of credit you are using out of the total amount available to you. Let us suppose, one Prashant Gupta, 28-year-old salaried employee, has a credit limit of ₹5 lakh and has already exhausted the limit of ₹4 lakh, the CUR stands at 80 percent.
And in case he raises the credit limit from ₹5 lakh to ₹10 lakh, the CUR would come down to 40 percent, thus helping his credit score to improve. The rationale is simple: lower the CUR, higher the credit score. 1.
Ask for raising the credit limit: Contact your credit card issuer and request a credit limit increase. Many issuers allow you to request increases online or through their mobile apps. Be prepared to provide information about your income and employment.
2 Automatic raises: In some cases, card issuers on their own review accounts for credit limit increases. If you regularly make on-time payments and also manage your credit responsibly, you may get an increase without having to ask for it. ALSO READ: How to ensure a good interest rate on your personal loan? 3.
Responsible usage: It is vital to make timely payments, and keep balances low relative to your credit limits, and avoid maxing out your cards. Using credit card responsibly can show to the issuer that you are a low-risk customer, making them more likely to approve a credit limit increase. 4.
By raising your credit score: It is vital to improve your credit score by regularly paying bills and keeping credit card balances low, and avoiding to open too many new accounts. So, when your credit score is higher, your profile will become more attractive to creditors at the time of asking for a credit limit increase. ALSO READ: Closing
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