If you’re trying to improve your credit rating, then one way is to lower your credit utilization ratio. That is, the amount you owe compared to the amount you could borrow.
It’s usually better to just pay down the principal, but sometimes that’s not possible. If you’re confident in your ability not to abuse it, raising your borrowing threshold will give your credit score an instant boost.
I’d assumed this was a complicated process requiring some degree of cringing. But it turns out increasing your credit limit is extraordinarily easy. An educator in my city’s free first-time homebuyer program described this method to me. I will try to transcribe it exactly as she said it:
“If you need a bigger line of credit, this is what you do. You call your credit card company and say, ‘I have been a customer of yours for however-many years. I have paid all of my bills in-full and on-time. I am pleased with my experience with you thus far, but I really need my credit limit extended by however-much, today. If you don’t want to increase it I’ll take my business elsewhere. I’m happy to hold if you need to get your supervisor’s approval, thank you.’”
The sleepy evening class full of tired working folks trying to absorb financial information around dinnertime was not usually very animated. Yet the eruption caused by this amazing power-move was not unlike Game of Thrones fans hearing their Khaleesi inform a bitch that “a dragon is not a slave.”
I did exactly what she said. You’d better believe it worked.
Confused about how credit works? We got you, boo: