Reduce your credit card limit.
Most people know that reducing their debts can increase their borrowing limit. But did you know that lowering your credit card limit can increase your borrowing capacity?
Lenders don’t like risk
In working out how much you can borrow, lenders determine the likelihood that you might default on the repayments. In performing this risk assessment, they look at a number of factors including your credit history and job security. But something else they consider is your credit card limit.
Reduce your credit limit – raise your borrowing capacity
In the eyes of a lender, the higher your credit card limit, the more chance you have to get into financial difficulty. So, if you want a simple way to increase your borrowing limit, get rid of any surplus cards, and reduce your credit card limit to the absolute minimum you need.
If you need help to manage your money more confidently so you can pass on good habits to your kids, give us a call at (08) 8231 4709 or send us an email at info@centrawealth.com.au
Reproduced from MFAA