Everyday it seems like your credit score becomes more and more valuable. Your credit score can determine how high or low your interest rate will be when applying for a loan. Depending on where you live your landlord or apartment owner may examine your credit to determine whether they want you as a tenant. Even insurance companies can use your credit score to determine your premiums. Having a healthy credit score can provide leverage in many facets of everyday life so here is a simple tip you can use to increase your credit score.

Tip: Increase Your Credit Limit(s)

Increasing the limits on your credit card(s) is not brand new advice; however, it is something that many people forget or didn’t know that they can ask for. Increasing the limits on your credit cards allows you accomplish two things: create lower credit utilization and generate extra borrowing power.

Lower Credit Utilization

An important and impactful aspect of your credit score is your credit utilization which is a percentage that measures how much of your credit you are actually using. The higher the percentage the worse your credit score will be. According to Credit Karma there are 5 ranges of credit utilization:

Excellent: 0-9%
Good: 10-29%
Fair: 30-49%
Poor: 50-74%
Very Poor: 75%+

By increasing your credit limit you instantaneously reduce your credit utilization.
For example, if you had a credit card with a $1000 limit and you used $500; your credit utilization would be 50%. However let’s say you were approved for an increase of an extra $500 now making your total limit $1500. Your credit utilization (with the same $500 balance) would drop to 33%. As you can see with little effort we just went from having Poor credit utilization to Fair credit utilization. This is HUGE as far as your credit score is considered.

Extra Borrowing Power

In addition to lowering your credit utilization by increasing your credit limits you also give yourself extra borrowing power. Having this extra money available to you helps build trust with your creditors. For instance, if you have $5000 in available credit but you use only $500 (giving you a credit utilization percentage of 10%) that shows that even though you could spend more money the fact that you choose not to makes creditors more willing to give you more money.

On-the-other-hand, having this excess available credit could help as a temporary emergency savings plan if you do not have one. As the following phrase suggest:

“It is better to have money you don’t need than to need money you don’t have.”


Call your creditors and find out how many times you can increase your credit limits. For example, Capital One allows increases every six months but other company’s allow increases as early as every three months. By increasing your credit limit not only are you giving yourself more borrowing power but you also lower your credit utilization percentage. With this tip you should see your credit score increase in no time.

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