Liz Weston

Dear Liz: Does requesting a credit limit increase on a credit card affect your credit score in any way?

Answer: Such a request can result in a hard inquiry on your credit reports, which can slightly ding your scores. If you get the increase, though, that usually has a positive effect on your scores.

Credit scoring formulas, including those developed by FICO and VantageScore, are sensitive to how much of your available credit you’re using. That’s especially true on revolving accounts, such as credit cards. The less of your available credit you use, the better: 30% or less is good, 20% or less is better, 10% or less is best.

It’s important to keep your balances low relative to your limits even if you pay those balances in full every month (as you should). The balances that are reported to the credit bureaus, and used in calculating your scores, are typically your statement balances. If those amounts are high relative to your credit limits, your scores probably will suffer, even if you pay that balance off immediately.

People keep their credit utilization low in a number of ways. They can spread their purchases across a number of cards, make more than one payment every month (typically one right before the statement closing date, and another before the due date) or ask for credit limit increases. Any of those actions can help increase the gap between the credit they’re using and their available credit, which can help their scores.