Focus on your credit score
The past couple of years have been tough on everyone, and some people who once had plenty of money in their bank account began to worry about where they would find the daily cash to pay bills. If Goldman Sachs denies your request for an increased credit limit, it may be due to a dip in your credit score.
Building an excellent credit score can take years and is always the long-term goal. In the near term, though, these steps should help you see an improvement.
Go over your credit report with a fine-tooth comb
You have the right to request a free copy of your credit report from the big three credit reporting agencies once a year. Once you have a copy from each agency, go over it with a fine-tooth comb. You're looking for mistakes. For example, if you see a debt that was never yours, it's a mistake and could reduce your credit score. If you've paid a debt off in full and your credit report still shows a balance, that's another mistake that could decrease your credit score.
Dispute errors
Disputing errors on your credit report is far easier than it once was. It's as easy as going to the credit reporting agency's website and using their online portal to let them know that your report contains an error. According to the Fair Credit Reporting Act, the agency has 30 to 45 days to investigate your claim and another five days to inform you of the results of their investigation.
Pay down balances
The credit utilization rate (also called "Amounts Owed") is worth 30% of your total credit score. The higher your balances are, the higher your utilization rate. Chip away at your debt, beginning with credit card debt. The goal is only to use a small percentage of your available credit.
When you consider that the average credit card limit in the U.S. in 2019 (for all cards held by a single person) was $31,015, it's easy to see how keeping the balances low can increase credit utilization.
Keep old credit cards open
As tempting as it may be to cut up and cancel credit cards that have lured you into spending more than you should, don't do it. If you can get by without using the available credit on those cards, it lowers your credit utilization rate. As far as the credit card issuer can see, you have all this credit but are choosing to use a small percentage of it. If you're afraid you'll be tempted to pull the cards out and use them, give them to a friend or family member for safekeeping.
Make all payments on time
No matter what's going on, make it a point to get payments in on time. It's a habit that slowly but surely builds your credit score.
Maintain a mix
Your "credit mix" is worth 10% of your credit score. A good credit mix means that your credit portfolio includes more than one thing. In other words, if the only credit you had were four car payments or four credit cards, a creditor would wonder if you are able to manage different types of credit. Show them you are by mixing up your debt.
Of course, your credit score may already be in great shape. If that's the case, good work! There's nothing left for you to do but wait to hear back from Goldman Sachs and carry on with your good credit habits. And next time you apply for a credit card, you'll be in excellent shape to apply for the high credit limit card you're looking for.
