This is a great question, but the answer varies depending on your credit history and your available credit. On the one hand, having little credit lowers your score. On the other hand having too much credit can also affect it as this increases your risk of debt. I have a a card with less than $500 credit limit, and this is what Credit Inform says on the top factors that lower my score:
Having very little available credit is a negative factor, because lenders worry that you are living beyond your means and may not be able to repay them. Having a lot of available credit can be considered either positive or negative, depending on how well you have paid your bills in the past. On one hand, it indicates that lenders have trusted you with large credit limits and that you do not need to use all of the credit available to you. On the other hand, it increases your risk of getting too much into debt.
For this reason I’m considering getting a second secured card hopefully with a higher credit limit. I believe this can help improve my credit score, as well as lower my debt-to-limit ratio (debt utilization).
Here are a couple of related articles:
If you have any more tips or good articles that can be added to this list don’t hesitate to comment. I would like to hear about your experiences and wether or not having a higher credit limit has helped raise your credit score.
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