24 Jun 2013

Need a Limit Boost?

If you can avoid the major pitfalls of using a credit card, then having a high(er) limit can be extremely handy for large purchases or long holidays. Of course, to boost your limit you need a good credit score—basically the measure of your creditworthiness. So, how do you go about getting a better credit score? Well, I did some digging and asking around and here’s what I’ve learned so far…

Oh, and by the way, I often hear people talking about disputing old, negative information in order to get them off your overall score; but this is, well, actually a bit dishonest, and can actually backfire. So, sticking to one of these would be a lot safer:

Scrutinize your credit report: There’s always the possibility that there will be errors and omissions on our credit reports—including negative marks that aren’t rightfully ours.

Keep your card in your purse: Part of a credit report is utilization, and this is usually determined by our statement’s closing balance. So, it doesn’t matter if you pay off your credit card bills early and in full. If you want to keep your utilization low (and give your credit score a quick nudge upwards) try to minimize using your credit. Don’t like carrying tons of cash? Use debit.

Consolidate multiple cards: If you end up with more than one card from the same issuer, contact customer service and ask if it’s possible to consolidate all of them into your first card. But don’t do so if you they won’t let you keep the total credit limit of all your cards. I don’t really understand the technicalities behind this move, but supposedly consolidating all your cards will increase the age of your credit lines, which will then push your utilization down.

Pay your debts: The lesser we owe and the lower the amount of interest we pay, the better our credit score. Of course, if you have enough money to immediately pay off your debts, you wouldn’t be in debt in the first place, right? Still, it’s something to consider…

Request an increase: Some credit card issuers will offer you a limit increase if you ask for it. Sometimes they will need additional information, and sometimes there will be time constraints; but the main thing is that you need to get in touch with their account managers. Now, finding them is the real challenge… :)

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