Retail credit
What is credit line increase (CLI)?
Credit line increase is a raise in the credit limit on a revolving account, granted either at the customer's request or proactively by the lender.
A credit line increase raises the maximum balance a borrower can carry on a credit card or other revolving line. Reactive increases respond to a customer request, while proactive increases are offered by the lender to selected accounts, typically after a period of good payment behavior. Line decreases are the opposite action, used to reduce exposure on riskier accounts.
Lenders use line increases to grow balances and reward good customers, balancing expected revenue against higher potential loss. Decisions usually draw on internal behavior scores, bureau data, payment history, utilization and months on book. For credit cards, US rules under Regulation Z require issuers to consider the consumer's ability to make the required payments before increasing a limit.
A larger line increases exposure at default, and the riskiest customers may be the most eager to use new credit. Increases granted on stale income data or without testing strategies against control groups can raise losses. Lenders should monitor the performance of increased accounts and compare it with similar accounts that did not receive increases.
See it in Risk OS
Credit line management: test line changes before you make them →
