Having a higher credit limit increases your ability to buy big-ticket purchases such as a solar roof. Since higher lines of credit can translate to good FICO scores, they can help you qualify for unsecured and secured solar loans in the future.
While a credit line increase is earned and not given, you may not receive it without asking. But this does not mean that you should make such a request without a strategy. Any reputable SunPower solar panels dealer will attest that it is all about timing, and you should plan it for months if you are to succeed.
Below are the things you should do to strengthen your case when applying for a credit card limit boost:
Increase Your Income
First of all, you should not ask for a credit line increase if your income is still the same. Having a more powerful credit card is a privilege, and your credentials should justify your request. If you have not gotten a raise, chances are that you will be denied. Even worse, you will almost certainly get a no if you have taken a lower-paying job.
You can only declare the incomes you can prove. Prepare the necessary verifiable paperwork upon your credit limit increase application. If you present enough evidence suggesting that you make more money now, then your wish may be granted accordingly.
Pay with Plastic Regularly
There is no better way to impress your credit card issuer than using your credit card regularly. Every transaction you make can enrich your payment history, which gives your bank or credit union more information about your financial habits. Using your credit card less shows your financial institution that you probably do not need access to more credit, which can cause the rejection of your application.
Moreover, you should watch your credit utilization and keep it below the threshold. Abusing your credit card will put you in a bad light. Ideally, your highest credit usage should be 30%. Borrowing at a higher percentage regularly can set the alarm bells ringing, which may tell your credit card issuer that you live off debt too much.
Zero out Your Balance Monthly
Paying off a considerable portion of your credit card balance monthly is enough to give your financial institution peace of mind. If you can reduce it to zero, though, do so. Demonstrating the ability to repay the full balance of your credit card bill sends a clear message to your bank or credit union. It is indicative of your reliability as a debtor and responsibility as a consumer. You may be asking for a higher credit line to borrow more money in the future, but an impeccable payment history can be your key to approval.
Do Not Apply for New Credit
Applying for a new credit card is just like asking for a higher credit limit for your older plastic, except that it is worse. A new credit account is more impactful to your FICO scores than a hard inquiry, which is triggered by a credit line increase application. If you have opened or requested to open a new account in the past 12 to 24 months, you might want to put off your credit limit increase request for now.
To say that it does not hurt to request to beef up your credit-card–driven buying power is a lie. Successful or not, an application will reflect on your credit reports, which may be taken against you later on if you do not time it properly.