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BOB offering 20% limit increase

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anirban.choudhury said:
Higher credit limit , won’t affect your debt to income ratio.
Debt to income is the amount of emi/fixed loan that you pay against your income
A credit limit is not a debt , but yes if you utilise the amount and then convert the same into EMI then it falls under debt and only then will impact your debt to income ratio
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Technically, it's not a debt, but you have the potential to be in that debt. That is why I mentioned the time frame: if you keep the higher limit and lower utilization for longer periods, the bank will consider you as a person with credit discipline.

But if you have acquired that limit in a short span of time, you are potentially a risk for new lenders.
Banks do consider the current limit and your annual income when calculating the limit for their product.
For people with relatively lower credit histories, if they already have a higher limit w.r.t annual income, limits for new products will be lower.
 
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hks789 said:
Technically, it's not a debt, but you have the potential to be in that debt. That is why I mentioned the time frame: if you keep the higher limit and lower utilization for longer periods, the bank will consider you as a person with credit discipline.

But if you have acquired that limit in a short span of time, you are potentially a risk for new lenders.
Banks do consider the current limit and your annual income when calculating the limit for their product.
For people with relatively lower credit histories, if they already have a higher limit w.r.t annual income, limits for new products will be lower.
Click to expand...
For credit limit allocation debt to income is not that important , but what matters their is debt to credit ratio which is your credit utilisation .

Generally if you have higher limit on your card , even if you got that in shorter time frame , generally people ask for LE to multiple banks once there has been a substantial increase in their income in that case at shorter time frame your limit would shoot up , which is perfectly OK .

The only thing that matters here is credit utilisation , a higher utilisation will indeed give lower limits , but a higher credit limit with very less utilisation will give higher limits in future cards or loans
 
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