A Higher Credit Limit Can Improve One’s Credit Score
NEW YORK, May 2, 2016 —- Almost eight in 10 U.S. credit cardholders who have asked for a higher credit limit have been approved, according to a new Bankrate.com (NYSE: RATE) report. The problem is that just 28% have asked.
“A higher credit limit isn’t just so you can buy more stuff, it can actually help your credit score,” explained Mike Cetera, Bankrate.com’s personal loans and credit analyst. “That’s because your credit utilization ratio – how much credit you’re using divided by how much credit you have available – is a key component of your score.”
- The success rate is much higher for those who are 30 and older (81%) than it is for 18-29 year-olds (46%).
- 84% of cardholders with annual household income of at least $30,000 were granted a higher credit limit versus 60% of those with annual income below that threshold.
- 81% of independents, 79% of Republicans and 66% of Democrats who asked were successful.
Bankrate.com found that 34% of Americans have never reviewed their credit history, leaving them vulnerable to errors and identity theft. Another 12% have reviewed their credit report but tend to do so less than once a year.
Credit scores can even affect romantic relationships: 38% say knowing someone’s credit score would affect their interest in dating that person. That includes 42% of millennials (the highest of any age group), 47% of college graduates and 50% of people with annual household income of $75,000 or more.
To help consumers monitor and improve their credit, thereby qualifying for the best loan terms, Bankrate.com offers a free monthly credit score, credit report and other helpful tools and advice at my.bankrate.com.
The survey was conducted by Princeton Survey Research Associates International and can be seen in its entirely here:
PSRAI obtained telephone interviews with a nationally representative sample of 1,000 adults living in the continental United States. Interviews were conducted by landline (500) and cell phone (500, including 310 without a landline phone) in English and Spanish by Princeton Data Source from April 14-17, 2016. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 3.7 percentage points.
Bankrate.com provides consumers with the expert advice and tools needed to succeed throughout life’s financial journey. For over two decades, Bankrate.com has been a leading personal finance destination. The company offers award-winning editorial content, competitive rate information, and calculators and tools across multiple categories, including mortgages, deposits, credit cards, retirement, automobile loans, and taxes. Bankrate aggregates rate information from over 4,800 institutions on more than 300 financial products. With coverage of over 600 local markets, Bankrate generates rate tables in all 50 U.S. states. Bankrate develops and provides web services to more than 100 co-branded websites with online partners, including some of the most trusted and frequently visited personal finance sites on the internet, such as Comcast, Yahoo!, CNBC and Bloomberg. In addition, Bankrate licenses editorial content to more than 500 newspapers on a daily basis including The Wall Street Journal, USA Today, The New York Times and The Los Angeles Times.
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