If you’ve recently opened up new lines of credit or already requested higher credit limits from other lenders, that’s not going to send a vote of confidence to your issuer. Lenders could conclude that you’re entering a financial emergency and need additional credit just to pay your bills. Whenever a new account is opened, the lender does what’s called a “hard inquiry” to view and analyze your credit reports. Each hard inquiry reduces your credit score by only a small amount — typically three to five points — and your score will typically bounce back quickly. However, too many hard inquiries in a short period of time will represent a red flag to potential lenders.
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Further, it might be obvious to some, but if your income has declined, that’s also one of the worst times to ask about expanding your borrowing power. Even though a new position may be providing you with greater personal satisfaction, in the credit card issuer’s view, a lower salary directly equals a diminished ability to repay. Finally, you likely shouldn’t ask for a higher credit limit if you’re credit score is still in recovery and hasn’t improved — or may have even fallen — since the account was opened.