Would raising your credit limit negatively affect your credit rating/score?

I’m not 100% sure about this, but every financial guidebook I’ve ever read said to keep getting your limit bumped every year if you need it or not. If it were harmful to your credit, I don’t think this practice would be so widely advocated for. Therefore, my best guess is that it’s neutral/beneficial to your credit score.

Actually, one factor in the secret matrix of the FICO score is that the higher your available credit is (your limit, less what you owe) increases your score. If you have $100,000 limit and owe $1,000 your credit score is better than a $10,000 limit and owe $1,000.

“Part of your credit score is calculated by the amount of credit you’re using compared to the total available credit. For example, you might have $2,000 in credit card debt. If you have total available credit of $10,000, you’re only using 20% of your available credit. Creditors like this. But if you have $2,000 on your cards and your total available credit is only $2,000, you’re using 100% of your available credit. Creditors don’t really like this at all.” Wealth Pilgrim

So, in this scenario, raising your available credit might be useful (if you don’t spend it all).

No. It will beneift your credit score but only if you don’t end up borrowwing more than you can afford to repay. If you do that you’re screwed.

Related to your question, based on your income and history, there’s a set amount as to the credit you can have available. This is important to realize when it comes to getting approved for large credit purchases, like a home mortgage.

In other words, if you have too much available credit on various credit cards, then that can limit the amount (and/or affect the rate) that a lender will give you for a new mortgage.

Also, there are several different methodologies to calculating your credit score… it varies by the reporting agency, the models they employ, the specific use-case, etc.

If you want to buy a house, the creditors assume that you are borrowing your full credit limit on all your cards (no matter how much you have actually borrowed). This lowers the amount of money they are willing to lend you for the house.

However, this is easily dealt with by closing all your cards except one at the time you want to buy the house.