Credit Reports

Its not uncommon for credit card companies to raise your credit limits; they do so to benefit you or do they? The truth is that it depends on who you ask. Many people struggle to have their limit raised, while others have their limits raised automatically. There are a variety of reasons that some find their limits raised while others dont. Lets take a look at the criteria that fit both scenarios.

Why Your Limits Were Raised

If you are in good standing with the credit card companies youre associated with then it is likely that they will periodically raise your credit limits. By why do they do it? Usually, in the letter you receive notifying you of this adjustment, you will be told that you have been rewarded for keeping your account in good standing. However, some feel that the real reason for raising accounts in regular intervals is to give you more money to spend and more interest to pay each month that you carry a balance.

One way to prevent this from happening is to ask the company you work with to lower your interest rate. This way, if you do carry a balance, the interest charges wont be as high. Also, you can request that credit card companies not raise your credit limits without your permission.

Why Your Limits Werent Raised

Now, if youre the person who wants to raise your credit limits, then you may be wondering why your limits werent raised. Here are a few reasons that this may be the case:

• Your level of income. If you have a lower level of income, your limit may not be raised because it is assumed that you wont be able to pay off the balance if you charge the full amount available to you.
• How you use your existing credit. If you use your existing credit irresponsibly (not paying on time, maintaining a high balance), you will not get a limit increase, and may even see it cut.

Credit card companies are usually eager to raise your credit limits if youre a good customer, so if youre really interested in having this adjustment made its good to contact your company to see how this can be done.

If your credit limit was cut recently by your credit card company, then you may be spinning your wheels to figure out what happened. But the truth is, there are a number of reasons that this can happen and believe it or not, it may not always be your fault.

So if you find that your credit limit was cut by your credit card company, take a moment to explore some of the reasons that this may have occurred:

• Irresponsible financial behaviors. Okay, this is definitely your fault unless youve been the victim of identity theft. If youve spent time running in and out of stores charging everything in sight to your credit card and didn't pay your bill on time, it wont take long for you to be deemed financially irresponsible and have your limit reduced.
• The suffering economy. In the wake of banks closing left and right, you may find that your credit limit was cut simply because there was no money available to back it up if charged. Some banks also feel that because people are losing their jobs, they wont be able to pay off their balance, and thus are lowering the balance to play it safe.
• Youmight be catching the blame for others mishaps. In recent years, some credit card customers have found that their credit limit was cut without them having done anything wrong. Whats happening is that some companies look at something called behavioral scoring to decide whether the people who shop in the same places as their customers have bad financial behavior. If they do, you as a customer may catch the blame by having your limit reduced.

Credit card companies are doing everything they can to stay afloat in challenging times, but unfortunately, customers can suffer as a result. So if you find that your credit limit was cut through no fault of your own, dont feel bad. By waiting it out, you may see your limit raised once again.

Many have wondered whether credit scores and a high credit limit are related, and are surprised to learn that they are. But how do they work in conjunction and affect one another?

Here are a few ways:

• The credit utilization ratio. This ratio basically looks at the balance of your available...

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