Capital One’s credit policies

Obtaining credit can seem a little mysterious. You send in an application, and you’re either approved, declined or, in some cases, offered different terms than you were expecting. 

What happens in between hitting “submit” and getting your answer? How do lenders make decisions about extending credit? When are you eligible for an increase? And what’s protecting you from discrimination? 

It can all be a little overwhelming, so let’s start with the basics.

A credit policy is a set of standards that financial institutions and other companies use to make lending decisions, including whether to offer credit or modify existing credit limits. 

Every lender’s credit policies are different. But they all must follow applicable fair lending laws and regulations. Those can include federal laws like the Equal Credit Opportunity Act (ECOA), which protects consumers from discrimination, as well as state laws and laws that apply only to certain kinds of loans. 

The ECOA is a landmark civil rights law that protects consumers from credit discrimination on the basis of race, color, religion, national origin, sex, marital status and age, among other things.

Capital One is proud to uphold the ECOA. Under this law, if your credit application is declined, you have the right to know why. If a consumer suspects a lender has been discriminatory, they can take action, thanks in part to the ECOA. 

Credit card companies use policies that consider many factors about an applicant’s creditworthiness to decide who gets credit and how much credit they get. These policies help creditors determine whether a potential borrower is likely to repay their loan, which is also known as credit risk. 

When you apply for a credit card or a credit line increase, Capital One uses your personal information and data from credit reporting agencies to determine your credit risk. The policy Capital One uses varies depending on whether you’re applying for a new account or a credit line increase on a current account. Some common variables these policies take into account include:

• Annual income
• Employment status
• Credit limits, balances and utilization ratio (how much of your available credit you’re using)
• Recent credit inquiries
• Mortgages, other debt—like student loans or car loans—and payment history 

For existing accounts, in addition to the variables above, information specific to your Capital One account—like your card payment history, for example—is used to determine your credit risk. 

If your credit risk changes, Capital One may adjust your credit limit. That could mean an increase or a decrease, depending on the circumstances.

Here are a couple ways Capital One cardholders may be able to get access to additional credit:

• Capital One-initiated increases: Depending on how long your account has been open, Capital One uses slightly different methods to determine whether or not to offer additional credit. If you’re given a credit limit increase, it’s an indication you’ve used credit responsibly. It also means that Capital One thinks a higher credit limit may help you continue to use credit responsibly while meeting your spending needs. And if you don’t want the increase, you can always decline it. Just call 1-800-CAPITAL (1-800-227-4825), and Capital One will reset your credit line back to its previous limit. Don’t want to be considered for a credit line increase? Call the same number to opt out of future consideration for five years. 
• Customer-initiated increases: These are increases requested by cardholders. When you make a request, you’ll be required to provide your total annual income, employment status and monthly mortgage or rent payment. Capital One takes those into account, along with other risk factors like those listed above, to determine whether to approve or decline the request.

Using your credit responsibly can put you in a better position to get approved for a credit card or credit line increase. In general, customers who are most often approved for credit line increases tend to use credit responsibly and use more of their credit line, either by spending and paying off the card each month or paying a balance off over time.

Some Capital One credit accounts aren’t eligible for a credit line increase even when you use your card responsibly. For example, new accounts or accounts that recently received an increase or decrease may not be eligible for a credit line increase.

If you want to learn more, check out some frequently asked questions about credit limit increases.

Remember, Capital One cardholders are never charged over-the-limit fees. View important rates and disclosures. And many eligible cardholders may be able to exceed their credit limits, especially for one-time spending needs. If your account has access, you can use the Confirm Purchasing Power tool to check if an overlimit purchase may be approved. You can also disable the ability to spend over your credit limit in your overlimit preferences.

Capital One is committed to helping our customers succeed by providing safe, affordable and equal access to credit—and through policies and tools that can help them manage that credit wisely.