How Much Will a Secured Card Raise My Score?

If you’ve done any research on how to build or rebuild your credit, you’ve undoubtedly stumbled across online forums or blogs that indicate that secured cards are a practical approach in that endeavor. As with most of these credit-building strategies, there’s a little bit of myth and truth circulating the web.

So, exactly how much will a secured card increase credit scores?

Consumers have lots of credit-building tools at their disposal. But if there were a trifecta of tools to help earn consumers good credit scores, it would include:

• getting a secured credit card
• becoming an authorized user on someone else’s account
• and finding a cosigner

It’s true that opening one or more secured credit cards will likely populate your credit reports with new, positive data. Paying your bill on time every month can help increase your credit score because payment history accounts for 35% of your FICO credit score.

That can certainly be helpful, especially for lenders with policies that reward you for having good information on your credit report.

But from a usage perspective, you’re limited to the credit limit established by the deposit you made with the lender. That means you don’t have a very impressive credit limit, and for good reason. You don’t want to tie up thousands of dollars of your cash simply to get a secured credit card with a larger credit limit. 

Even modest use of a secured credit card can lead to unmanageable debt if you’re not careful. And, if you know anything about credit scoring models, you know they don’t reward you for having credit cards with large balances. In that respect, secured cards can work against you.

In consumer lending, the term “secured” indicates that some sort of asset was provided to back the extension of credit. The asset secures the extension of credit and, thus, helps protect the lender in cases of default.

Mortgages, home equity style loans, and auto loans are examples of secured extensions of credit. In those examples, houses and cars act as security for the lender. 

When you signed all of your loan paperwork, you pledged those things as security for the lender. If you were to default on a mortgage or an auto loan, you’d lose your home or your car.

The same thing holds true for secured credit cards. But instead of pledging some physical asset, you’re pledging money.

With secured credit cards, the card issuer asks you to make a deposit in exchange for a new card with a credit limit equal to or close to the amount of cash you deposited with the lender. 

So, for example, if you deposited $500 with the issuer, you may get a secured card with a $500 credit limit.

If you default on a secured card, the issuer will keep your security deposit to pay your balance. It will also report the default to the credit bureaus. 

You can’t argue that because you already paid them, your card was never actually late. The deposit isn’t payment for future invoices. You still have to pay your bills just as you would any other extension of credit.

One more thing to keep in mind as you consider applying for a secured credit card is whether it reports to the major credit reporting agencies. 

Not all secured card issuers report their accounts to Equifax, Experian, and Transunion, the three main credit reporting agencies, because it’s not mandatory. This means you cannot force your card issuer if its policy is to report accounts to only one or two of the credit bureaus.

Secured cards that are not reported to all three of the credit bureaus have even more limited credit-building value. If an account is not on a credit report, it’s like the tree that falls in the woods. Nobody hears it, and nobody cares. 

If you open one or more secured cards and the card issuer only reports to one or two credit bureaus, the card will have no value to that third credit report. That also means any scores derived from that third credit report will not and cannot consider how well you’ve managed the card because the scoring model cannot see the card.

The easy way around this is to shop for secured cards from card issuers that report to all three credit bureaus, such as:

The secured Chime Visa® Credit Card

CardRates Expert Rating

The secured Chime Visa® Credit Card

4.5/5.0

About this rating

Our experts rate credit card offers based on factors like rewards, APRs, signup bonuses, fees, and approval rates, with a focus on benefits that provide the best value. We also consider cardholder needs such as credit-building potential, issuer reputation, and customer service. Our ratings are unbiased, updated regularly, and not influenced by issuers.

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Ashley Fricker Senior Editor

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★★★★★ 4.5/5.0

at Chime’ssecure website

Our Review »

• No minimum balance requirements*
• No credit check**
• 2% cash back on category of choice with direct deposit***
• The perks of credit building meet the best of banking****
• Chime Checking Account required to apply for the Chime Visa® Credit Card

• Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The secured Chime Visa® Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A. pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your Card for its issuing bank.
  *Money added to Chime CardTM will be held in a secured deposit account as collateral for your Chime Card, and you can spend up to this amount. You can use money deposited in your Secured Deposit Account to pay off your charges at the end of every month.
  **Out-of-network ATM withdrawal and over the counter advance fees may apply.
  ***With a qualifying direct deposit, earn 2% cash back on category of choice on eligible secured Chime Visa® Credit Card purchases.
  ****On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Results may vary.

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Intro (Purchases) N/A

Intro (Transfers) N/A

Regular APR N/A

Annual Fee No annual fees

Credit Needed Poor/Fair/Limited/Damaged

Secured Self Visa® Credit Card

CardRates Expert Rating

Secured Self Visa® Credit Card

4.2/5.0

About this rating

Our experts rate credit card offers based on factors like rewards, APRs, signup bonuses, fees, and approval rates, with a focus on benefits that provide the best value. We also consider cardholder needs such as credit-building potential, issuer reputation, and customer service. Our ratings are unbiased, updated regularly, and not influenced by issuers.

Ashley Fricker Senior Editor

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★★★★★ 4.2/5.0

at the issuer’ssecure website

• The secured Self Visa® Credit Card* requires no credit check or minimum score.
• Reports to all 3 major credit bureaus to establish and build credit, with free access to your credit score.
• Secure your credit line with a refundable security deposit as low as $100.**
• Deposits are returned upon account closure after settling outstanding balances.
• *The secured Self Visa® Credit Card is issued by Lead Bank, Sunrise Banks, N.A., or First Century Bank, N.A., each Member FDIC.
• **Qualification for the secured Self Visa® Credit Card is based on meeting eligibility requirements, including income and expense requirements and establishment of security interest. Criteria subject to change.

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Intro (Purchases) N/A

Intro (Transfers) N/A

Regular APR Variable APR of 27.49%

Annual Fee $0 annual fee for the first year only, $25 annual fee thereafter

Credit Needed None, Limited, Poor, Fair

opensky® Secured Visa® Credit Card

CardRates Expert Rating

opensky® Secured Visa® Credit Card

4.0/5.0

About this rating

Our experts rate credit card offers based on factors like rewards, APRs, signup bonuses, fees, and approval rates, with a focus on benefits that provide the best value. We also consider cardholder needs such as credit-building potential, issuer reputation, and customer service. Our ratings are unbiased, updated regularly, and not influenced by issuers.

See Our Review»

Ashley Fricker Senior Editor

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★★★★★ 4.0/5.0

at Capital Bank N.A.’ssecure website

Our Review »

• Earn up to 10% cash back on everyday purchases
• No credit check required – 89% approval rate with zero credit risk to apply!
• Boost your credit score fast—2 out of 3 opensky® cardholders see an average increase of 47 points after 6 months
• Track your progress with free access to your FICO® score in our mobile app
• Build your credit history with reporting to all three major credit bureaus: Experian, Equifax, and TransUnion
• Seamless payments—add your card to Apple Pay, Google Pay, and Samsung Pay
• Start with just $200—secure your credit line with a refundable deposit
• Fast and easy application—apply in minutes with our mobile-first experience
• Flexible payment options—pick a due date that works for you
• More time to fund—spread your security deposit over 60 days with layaway
• Join 2 million+ cardholders who have used opensky® to build better credit!

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Intro (Purchases) N/A

Intro (Transfers) N/A

Regular APR 23.89% (variable)

Annual Fee $35

Credit Needed No credit, Poor, Fair

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By using a card that reports to all three bureaus, you will then know for certain that you’re getting the maximum value out of opening a secured card.

The Fair Credit Reporting Act allows negative information to remain on your credit reports for seven and 10 years. Those who have gone through the credit rebuilding process know firsthand that it’s a long journey. 

Adding a secured credit card to your credit reports doesn’t cancel the negative impact of a derogatory credit history. Secured cards are not a silver bullet. You need to be realistic with your expectations.

Adding a secured card to your credit reports can help rebuild your credit, but it can’t eliminate the impact of defaults, late payments, and collections. A secured card won’t turn your 580 FICO Score to 700 overnight.