As I mentioned in an earlier post, periodically raising credit lines is a good way to boost your overall available credit total and percentage, which over time will lead to a higher credit score and a larger amount of supportable debt.
But there is a downside if that heightened credit line can only be achieved by a large series of new credit inquiries. That’s why you need to take caution when raising credit lines.
Some banks and credit card providers will pull a credit report to determine whether your credit line can be raised, while others will do it automatically based on their own data without touching your credit report.
It’s important to differentiate the two, and make sure you’re raising credit limits while avoiding an unnecessary credit pull, which could lower your credit score. It’s easy to avoid a credit inquiry if you make the credit line increase request online, and usually the website will note whether or not a credit inquiry is necessary.
If you have credit cards with American Express or Citibank, they should tell you what you’re credit line can be raised to without a credit pull on the spot.
However, if you want an amount higher than what they offer automatically, they may pull your credit. With Chase they seem to pull a credit report no matter what, and can be quite stingy with regards to increased credit lines.
Either way there should be associated documentation on the website if you make the request online, so look before you click. If you want to be absolutely sure, do it over the phone and make sure you ask the representative whether they will be pulling your credit, or hitting you with an inquiry. Chances are they won’t, but it’s wise to ask.
As always, make sure you don’t make any new credit inquiries before, or during a mortgage application or an auto lease. These large purchases typically call for an excellent credit score, and unrelated credit inquiries can lower your credit score in the short term, and worsen your financing terms.