How much can a secured credit card raise your score?

Question

A secured credit card is a powerful tool for anyone on a credit-building journey. These cards can be easier to qualify for than other types of credit cards, but they’re just as useful for building credit.

You can use a secured card as a first step toward establishing great credit — whether you have no credit history or you’ve made mistakes in the past that left you with bad credit — so you can qualify for more rewarding credit cards, important loans, and lower interest rates in the future. Here’s how to get started:

Read more: Best secured credit cards

What is a secured credit card?

A secured credit card requires a refundable security deposit to open. You’ll often need a security deposit of at least $200, though the exact amount depends on your card, the issuer, and the terms of your approval.

In most cases, that security deposit will act as your line of credit; the amount you pay will be the maximum credit limit you can spend on your card. You might think of it like a debit card, since you can only spend up to the amount that you deposit. If you want a higher limit, you can choose to pay a higher deposit, usually up to a maximum.

Because of the security deposit, secured credit cards can be easier to qualify for than unsecured cards. They often charge no annual fees but may have fewer benefits and higher interest rates than traditional credit cards.

Once you’re approved and open your secured card, you can use it just like any other credit card. Over time, your issuer may offer to refund your deposit and upgrade you to an unsecured credit card.

Read more: Secured vs. unsecured credit cards — What’s the difference?

How to increase your credit score with a secured credit card

When you apply for a secured credit card, it’s important to make sure the issuer regularly reports to all three of the major credit bureaus: Equifax, Experian, and TransUnion. This is how you’ll increase your credit score — as long as you’re using your card responsibly.

Related: How to use a credit card responsibly

These are some of the most important actions you can take to make sure you’re increasing your score as much as possible with a secured card:

Pay on time: Payment history is the most important factor in your FICO credit score, so a great credit score depends on a strong history of positive monthly payments. That means you should pay at least the minimum on your credit card bill by the deadline each month.
Keep your credit utilization rate low: The ratio of how much credit you’re using compared to your overall available credit is another influential factor in your credit score. The lower your credit utilization ratio, the better — which can be tough with a secured card that has a low credit limit. Keep an eye on how much you’re spending and aim to keep it 30% or less than your overall line of credit. If, for example, your credit limit is $500, you’d want to spend under $150 each month to keep your credit utilization low.
Pay off your balances: Carrying a debt balance doesn’t necessarily keep you from having good credit, but it can impact your score by increasing your utilization. More importantly, it will cost you a lot of money in interest charges over time. Pay your card balance in full by the due date each month to help keep your utilization low and avoid debt.

Another important factor in your credit score is the overall age of your accounts. A longer credit history is better for your score, so it’ll grow over time as you continue to use your secured card with these good credit habits in mind.

Read more: What is a good credit score?

How much can a secured card raise your score?

How much your new secured card will impact your score depends on how you use it. Building credit takes time, so you’ll see the results of making on-time monthly payments and keeping a low credit utilization with your secured card over several months.

It may not be instant, but good habits will help your score rise over time.

On the other hand, if you have other loans or credit card accounts already on your credit report with missed or late payments, that could negatively affect your score, and reduce any positive impact from your secured card.

You can see for yourself how much your secured card is helping to raise your score by regularly checking your credit score and credit report. You’ll be able to track your progress over time. Plus, you can keep an eye on your credit report to make sure it’s accurate — and quickly take care of any errors that could affect your score.

Read more: How to check your credit score for free

Best secured credit cards

These are some of our favorite secured credit cards for building credit today:

Capital One Quicksilver Secured Cash Rewards Credit Card

Learn more Capital One Quicksilver Secured Cash Rewards Credit Card * Annual fee $0

Welcome offer None
Rewards rate
- 5% unlimited cash back on hotels and rental cars booked through Capital One Travel
- 1.5% unlimited cash back on every purchase, everywhere
Benefits
- No annual or hidden fees; see if you're approved in seconds
- Earn back your $200 security deposit as a statement credit when you follow card best use practices, such as making payments on time
- Be automatically considered for a higher credit in six months with no additional deposit

Why we like it: The Capital One Quicksilver Secured card is a great way to build credit while also earning rewards on spending. The flat 1.5% cash back means you can save money on every purchase you make, no matter the category. There’s a $200 minimum security deposit which acts as your credit line, but in as little as six months you can be considered for a higher credit limit without another deposit. As you use your Quicksilver Secured card over time, you can also qualify to upgrade to the unsecured Quicksilver card and get your deposit back.

Read our full review of the Capital One Quicksilver Secured Cash Rewards Credit Card.

Capital One Platinum Secured Credit Card

Learn more Capital One Platinum Secured Credit Card * Annual fee $0

Welcome offer None
Rewards rate None
Benefits
- No annual or hidden fees; see if you're approved in seconds
- Earn back your security deposit as a statement credit when you follow best practices, such as making payments on time
- Be automatically considered for a higher credit in six months with no additional deposit

Why we like it: You won’t earn any rewards with a Capital One Platinum Secured card, but it does have some perks that set it apart from many other secured credit cards. The primary benefit is a potentially low security deposit. When you’re approved, you’ll be assigned either a $45, $99, or $200 security deposit to open your account with a $200 credit line. You can choose to deposit more for a higher credit limit, and by practicing good credit habits over time, you can qualify to upgrade to an unsecured card and get your full deposit back.

Read our full review of the Capital One Platinum Secured Credit Card.

Bank of America® Customized Cash Rewards Secured Card

Learn more Bank of America® Customized Cash Rewards Secured Card * Annual fee $0

Welcome offer None
Rewards rate
- 3% cash back* in the category of your choice: gas and EV charging stations; online shopping, including cable, internet, phone plans and streaming; dining; travel; drug stores and pharmacies; or home improvement and furnishings
- 2% cash back* at grocery stores and wholesale clubs
- 1% cash back on all other purchases
- *Earn 3% and 2% cash back on the first $2,500 in combined purchases each quarter in each tier, then earn 1%
Benefits
- Helps build your credit while earning 3% cash back in the category of your choice
- You can access your FICO® Score updated monthly for free, within your Mobile Banking app or in Online Banking
- Access to credit education on topics like using credit cards responsibly, budgeting, and more
- Set your own credit limit by putting down a security deposit of $200 to $5,000

Why we like it: The Bank of America Customized Cash Rewards Secured Card is another option with cash back on your spending — though you’ll need to be a bit more proactive to maximize the rewards you earn with bonus categories. Each quarter, earn 3% cash back in your choice category and 2% back at grocery stores and wholesale clubs, up to a combined $2,500 spent across both the 3% and 2% categories. You can change your 3% choice category once per calendar month or keep it the same. This card also has a minimum $200 security deposit which will act as your credit line, but Bank of America periodically reviews your account to determine if you’re eligible to get it returned.

Editorial Disclosure: The information in this article has not been reviewed or approved by any advertiser. All opinions belong solely to the Yahoo Finance and are not those of any other entity. The details on financial products, including card rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the bank’s website for the most current information. This site doesn't include all currently available offers. Credit score alone does not guarantee or imply approval for any financial product.