Question: Brian from Dallas was surprised to see an inquiry surface on his credit report via the credit monitoring service he uses and found that when he recently called his credit card company to request an increase in his credit line, the issuer posted an inquiry to his credit report. Brian’s question was whether or not this was a normal practice when requesting a credit card limit increase?
Answer:
This is not surprising and is a perfectly acceptable practice in the industry. Many credit card lenders will likely pull a fresh credit report and score on an existing card holder when that cardholder requests incremental credit. When a person requests a line increase they are in essence proactively seeking new or additional credit. The credit card lender will review the internal information they have on how you are managing the credit card account you have with them as well as pull a credit report and score to get a picture of how you are managing your credit with all of your other obligations. If you pass their credit screens, they will grant you the line increase. The inquiry associated with the credit pull could impact your credit score.
[Resource: Dusting Off Your Credit Cards? 5 Things You Absolutely Must Do]
This is different from when a credit card lender proactively sends you a notice that you have received a line increase (you did not request the extra credit). Many people receive these statement messages notifying them that they have been granted a line increase based on their being a valued customer. This is especially common right before the holiday shopping season. In this situation, the lender will conduct a review through an account review program commonly called a credit prescreen before making the line increase decision. These prescreened offers typically post to your credit report as as a soft inquiry but it’s not considered by the score because you are not proactively seeking new credit.
Have a credit question? Email Credit.com’s credit experts at creditexperts (at) credit.com.
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