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A simple way to increase your borrowing capacity


Most people know that reducing their debts can increase their borrowing limit. But did you know that lowering your credit card limits could enhance your borrowing capacity?

Lenders want to minimise risk

In working out how much they will allow you to borrow, lenders calculate the likelihood that you might default on your mortgage repayments. In performing their risk assessment they look at a number of factors, such as your credit history and job security, but they also consider your credit card limits.

Reduce your credit limit to enhance your borrowing power

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 enhance your borrowing capacity, get rid of any surplus cards and reduce your credit card limits to the absolute minimum you need.

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