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Increasing Line of Credit

Increasing your line of credit can be a difficult task but it is not an impossible one. There are many things that a borrower can do to increase their line of credit.

The level to which your line of credit can be raised depends upon the kind of line of credit you have. Some lines of credit will be easier to increase than others.

For example it might be possible to raise a cash (or checking) line of credit at a bank by simply putting more money into an account. On the other hand it can be very difficult to raise a home equity line of credit.

Increasing Business Lines of Credit

The checking lines of credit provided by banks to business customers are generally based upon the amount of money that’s run through the business’s checking accounts. It is often easy to raise these lines of credit by simply putting more money into the account.

A business might be able to get a higher line of credit from its bank by transferring more cash into an account. One way to do this might be to take money out of a savings or investment account and put it in the checking account before you apply for a higher line of credit.

Online lenders, hard money lenders and others that make direct lines of credit available to business are easier to work with. These lenders will be more likely to give a business a higher line of credit. Unfortunately they will usually charge a much higher interest rate on that line of credit.

Paying off an existing line of credit can also get a lender to give you a higher line of credit. Such an action proves that you are a good risk because you will pay your lines of credit off.

Increasing a Home Equity Line of Credit

Usually the only way to increase a line of credit on a piece of real such as a home is to pay off the equity. These lines of credit are secured by the equity on the property, so they are limited by the amount of equity on the property.

Equity is a measure of the difference between the value of a property and the amount it is mortgaged for. Generally, the more the property is mortgaged for the less equity that is available.

The only way to increase the equity on a home or other real estate is to pay off some of the debts on it. Paying off existing lines of credit, the mortgage or other loans on the property will increase the amount of equity available. Making larger mortgage payments or paying off a large percentage of the mortgage will give you more equity.

Once you’ve increased the equity in a property you should be able to apply for a higher line of credit. One thing to remember about equity lines of credit is that the amount of credit available is a percentage of the equity usually 80%.

Improving Your Credit Rating

You might also be able to get a higher line of credit if you have improved your credit rating. Lenders will usually make more credit available to those with a better credit rating.

Checking your credit report and taking action to improve your credit rating can help you increase your line of credit. Raising your credit score a few points can help you increase your line of credit.