How to Apply for a Credit Limit Increase with Navy Federal

Introduction

• Presenter discusses securing a $49,000 credit limit with Navy Federal.
• Goal: Show how to apply for a credit limit increase, strategies, and navigating Navy Federal's rules and requirements.

Navy Federal Overview

• Navy Federal has a good reputation for being friendly to members with less-than-excellent credit.
• Known for high credit limits off the bat.
• Combined credit limit of $80,000 across all Navy Federal cards.
• Few members have more than $80k but tend to get limits clawed back.

Navy Federal Unsecured Credit Cards

• Five Unsecured Cards:
  • Maximum of three cards per member.
  • Flagship Card: max $80,000 limit.
  • Other cards: max $50,000 each.

Reasons for High Credit Limits

1. Large Purchases: E.g., presenter paid a $40k tax bill using Navy Federal card.
2. Credit Score Improvement: Higher limits can reduce overall credit utilization.
3. Future Applications: High limits on existing cards make other issuers more likely to offer high limits.

Which Credit Bureau is Used?

• Navy Federal uses Equifax F9 score for credit limit increases.
• Not easily accessible without purchase; estimated with free apps like Credit Karma.

Soft vs. Hard Inquiries

• Phone or website requests usually result in a soft inquiry.
• Phone requests are more likely to result in a hard pull.
• Prevent hard pulls by freezing Equifax credit.

Criteria for Credit Limit Increase (CLI)

• 91/3 Rule: Wait at least 91 days and 3 full statements cycles after card approval.
• Set a reminder for 92 days post-approval.
• 181 Days Rule: Wait 181 days (6 cycles) between successive CLI requests.
• Recent applicants won't be penalized for early requests; just denied.

Strategies for Success

1. Low Credit Utilization: Keep utilization low, ideally paid off, for better chances.
2. Other Accounts: Keep balances below 30% utilization.
3. Derogatory Remarks: Recent negative marks reduce chances; repair your credit.
4. Navy Federal Relationship: Multiple accounts with Navy Federal (checking, savings, loans) favor better relationships.

CLI Application Steps

1. Select target account for CLI.
2. Click 'Manage Card' -> 'Primary Card' -> 'Maintenance' -> 'Increase Credit Limit'.
3. Enter requested total credit limit (not the increase amount).
4. Provide employer and income details (include all sources).
5. Enter housing information (ownership status, monthly payment).
6. Review application and submit.

Post-Application

• Instant approval or continued review for 2-3 business days.
• Denials will come with an adverse action letter explaining why.
• Can ask for reconsideration, likely resulting in a hard inquiry.
• If submitted online or via the app (soft pull), can retry post-fix.

Conclusion

• Understand strategies and rules to maximize CLI chances.
• Choose the right Navy Federal card to maximize benefits.