If I’m eligible for a line of credit increase request on my credit card, request one, but am declined one, does it hurt my credit score? If it can hurt my credit score, is it situational or does it happen in pretty much every instance?
EDIT: eligible as in I meet the criteria to make a request (ex. been 6 months since last line of credit increase). Edited question to reflect this
There are really only two ways that your credit limit will be increased on a standard credit card:
You ask for it
Most of the time this means you'll see a new hard inquiry on your credit report. Expect to see a ding of a few points from your credit score (single digits). If your credit is already good, you've been managing the account well, and haven't already had any increases in the last year or two, it'll probably be granted. The hard inquiry stays on your report for 2 years whether or not they grant you an increase.
It's just given to you
If you have been using the card responsibly, the company may give you an increase without you having to ask. You won't see a hard inquiry added to your credit report in this case, but they should write to you to let you know about your new limit (they'll want you to start using it after all - more merchant fee income for them). If you don't want the new limit for some reason*, you'll have to ask them to reduce it. There is no penalty for doing so.
* E.g. you're mortgage shopping and want to minimize your current debt-to-income ratio.
When you say you're "eligible for an increase" I assume you've received a mailer from your credit card company suggesting you ask for one. Even if you are pre-screened, following up on this and asking for the increase will still put a hard inquiry on your report, however the pre-screen means they've already done a soft inquiry and are pretty confident you will qualify.
If the card issuer makes a "hard pull" of your credit history, a new hard inquiry will be added to your report and your score will be affected by a few points. This may or may not have an effect on future credit applications, and will stop being a score factor in a year.
However, many issuers do a "soft pull" on a limit increase request, which will not affect your score. As an example, my cards from Capital One and Discover will do a soft pull when I ask for an increase every few months for normal credit building. Navy Federal Credit Union, on the other hand, will do a hard pull for an increase request. Every. Single. Time. If it is not clear which kind of inquiry the card issuer will do, just call them up and ask.
Either way, being declined for the increase or any credit application will not affect your score. Requesting it might affect your score.
Also, don't stress too much about the hard inquiries. They're a normal part of credit growth, and a small and temporary part of your score.
In my experience with all my credit cards, whenever I ask for a line of credit increase, the bank evaluates only my relationship with them (i.e. on-time payments, debt to credit ratio, etc.). As a result, a request does not generate a hard credit pull and does not impact my credit score - even if the request was declined. If they needed more information and needed to access your credit report, they will ask you for permission beforehand and you can deny that with no repercussions. However, it does depend on the wording of the request before you click "Submit".
