If you’ve recently got a credit card, you might have found that you were accepted for a lower credit limit than you were hoping.
How much credit you’ll be accepted for – or if you’re accepted at all – depends on your credit history. This means that if you’ve had problems managing credit in the past, you could get a lower credit limit.
However, you’re not necessarily stuck with this, as you may be able to change your credit limit. Let’s take a look at how you could do this, as well as how your credit history affects what credit you’ll be eligible for.
Credit limit and credit history
Any time you open a credit agreement – whether this is a loan, credit card or mortgage – it shows up on your credit history. For each month that you have these open, your credit history will show whether you’ve paid on time, paid late or defaulted on the payment.
If you’ve got an adverse credit history because you’ve made a few payments late or even missed some payments, some lenders will be more likely to turn you down when you apply for more credit. Other lenders might not turn you down but they could accept you for a lower credit limit – for example, if a credit card had an advertised limit of £500 and you only get accepted for £200. This is because they’ve looked at your credit history, measured it against their lending criteria and decided that you might not be able to manage the higher amount of credit. If you were relying on being accepted for the full amount of credit – to buy a car, for example – you could find this difficult.
Just because you’ve been accepted for a lower limit on a credit card, it doesn’t mean you’re stuck with this though. Depending on your credit card provider, you could be offered a higher limit after a while, providing you’ve been managing credit responsibly at the lower limit. This is because if the credit card provider can see you’re able to cope with the credit limit you’ve been accepted for, they might decide that you’ll be able to handle taking on more credit.
You don’t have to wait for your credit card provider to offer you a limit increase either – you could get in touch with them and ask for one. It’s best to wait for at least a few months before doing this though – use the credit card at its current limit, don’t miss any payments and demonstrate to your lender that you’re a responsible borrower. This could make your lender more likely to grant you a credit limit increase, if they think you’ll be able to afford the repayments.
You may also find that your card provider approaches you, without you asking, to offer you a higher limit. You are not obliged to accept the higher limit. Remember that even if you accept a higher limit that doesn’t mean that you should borrow up to it – you should never borrow more than you can comfortably afford to repay.
Ocean Credit Card
If you’re an Ocean Credit Card customer and you’ve been accepted for a lower limit, you might be able to get this limit increased. If you don’t go over your credit limit and you make at least your minimum payments on time every month, we’ll offer you up to two credit limit increases a year. We’ll review your credit limit regularly and if we think you’re managing your current limit responsibly, it’s more likely that we’ll agree that you’re able to take on more credit.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.