Increase Your Credit Score – Credit Line Increases Without a Hard Pull

As far as I’m concerned, having a high limit on your credit card can only be advantageous because it will decrease your credit utilization. Remember that credit utilization is the main factor in the amounts owed on your credit score and accounts for 20% of your credit score. As a refresher the components of your credit score are:

 

1 – Payment History

2 – Amounts owed (including credit utilization)

3 – Length of credit history

4 – Hard pulls

5 – Types of credit used (credit cards, loans, etc.)

Credit utilization is determined by dividing the total balances on all your credit cards by the total credit limit on all your cards. Hence, by increasing your credit limit on one or more credit cards, you are thereby reducing your credit utilization. That’s why I always recommend that people don’t close high limit credit cards. Capital One issued me the Venture Card with a $30K credit limit two years ago and although I wasn’t using the card, I called and had them reduce my card to the no fee version, which helps me avoid credit card annual fees, but maintains my high available credit limit.

According to this post on Sweating The Big Stuff, Bank of America will increase the credit limit on your card without a hard credit pull! This is great news because a hard pull, would definitely lower your credit score (albeit temporarily) by 3-5 points. All you have to do is contact Bank of America to request the credit increase and justify the reason why you need it. I think I’ll do that today!

 

 

 

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