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.
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.