Many people often rack their brains on how to increase the credit limit of their line of credit. There are various means to increase the line of credit limit. One of the ways is to request a line of credit limit increase with your lending institution. Before opting for this approach, the key question to ask yourself here is, “Does requesting a credit limit increase hurt my credit score?” The answer is yes, it may. Requesting an increase in the credit limit may trigger a “hard enquiry” into your credit report. This means that your lender will scrutinise your creditworthiness by re-evaluating your CIBIL score. Too many hard inquiries into your CIBIL score can hurt your credit score. It can have a negative impact on your creditworthiness and your future borrowing capacity.
On the other hand, if you have a very good line of credit repayment reputation or your income has increased, you may be eligible for an automatic credit limit increase. This is one of the best ways to increase your credit limit because it means that your lender trusts you and treats you as a valued and reliable customer. You are considered as one of the customers who will seldom default on repayments.
On the flipside, not repaying your line of credit dues can lead to a reduction in your line of credit limit and damage your creditworthiness.