Will Getting A Secured Credit Card Help My Credit? 


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By Sa El

Last updated 11/25/2019


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Summary: Getting a secured credit card can either help or harm your credit depending on how you use it. 

There are a ton of resources online about getting a secured credit card but trying to figure out if a secured card will help your credit can be confusing.

But the truth is: 

There are several ways that a secured card can affect your credit, but once you figure out the right steps to take, a secured card will be able to help your credit. 

will a secured card help my credit

In this post today I will go over how getting a secured credit card can help your credit and the things to avoid to make sure it doesn't harm your credit.

What Is A Secured Credit Card?

In order to understand if getting a secured card will help your credit, we must first understand what a secured credit card is.

A Secured Credit Card is a type of credit card that is for people with little to no credit or bad credit. 

The way it works is that you must secure the credit limit with a deposit before you can get access to the card. 

This security deposit is usually around $200.00 and is where the name "secured" credit card comes from. 

The card functions like a traditional credit card and can be used anywhere a Visa or MasterCard is accepted. 

However, since it is a secured card, and usually people needing this card will have sub-prime credit, you usually see much higher interest rates.

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Secured Cards Also

Report To The Bureaus - The best thing about a secured card is that it will report to all the credit reporting agencies when you start paying your monthly payments. 

Secured Cards can be much easier to qualify for since you don't need a good credit score to get approved.

Can Graduate - Depending on the secured credit card that you get, there are some options for graduating the card from secured to unsecured.   At that point your deposit would be returned and your credit limit increased.

Allow You To Choose Your Credit Limit - Along with the initial deposit, you can also continue to add funds to your secured credit card limit, you can get it all the way up to $5,000 on some credit cards which really helps your utilization rate.

How Your Credit Score Works?

Two primary credit scores are being used at the moment, the VantageScore and the FICO Score.  

Currently, about 90% of all lenders are using the FICO score, so you probably will want to focus on the FICO Score when trying to determine your actual credit score. 

The score ranges from 300 to 850, and the higher the score, the better. 

That’s why before you get a secured card, be sure to get a free credit score and determine if you have a good or bad credit score

Each credit score system uses certain factors to come up with your actual score; below are the factors for your FICO score and how much each element affects your score: 

In a recent study, we found that *48% of paying, credit repair clients got a 100+ credit score gain or more.   If you don't have serious time to devote to your dispute letters, we recommend you hire the pros to help.  Check out our #1 choice for professional credit repair. 

Payment history (35%)

So, the reason people keep going all bonkers about "pay your bills on-time" is because your payment history accounts for a HUGE chunk of your credit score.

It is essential that you pay your bills on time and don't have any late payments.

Getting a 30, 60, or 90 day late on your credit can make it super hard to obtain credit for several years.

Having a good payment history is where you should put 95% of your focus. 

Credit utilization (30%)

The next most important factor is how much of your credit you are actually using. 

Using more than 30% of your credit is usually seen as high credit utilization and you will start to immediately see negative affects on your score. 

Your goal should be to keep each individual card under 30% utilization and keep your overall credit utilization under 30%.

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Length of credit history (15%)

This is one of the only factors in your credit that you have no control over.

Your length of credit history, or average age of accounts is something that is calculated based on your oldest account.

Every time you add a new account to your credit report, it will decrease the average age of your overall accounts.

The longer credit history you have, the better your score will be.

Quick Tip:

Always figure out which credit scoring method will be used before you apply for credit.

Credit mix (10%)

Having more than one type of credit is also important, you can have installment loans, revolving loans, auto loans, mortgages, credit cards, and personal loans. 

It's a smart move to have different types of credit so that your score can keep going up.

New credit (10%)

You want to keep your new credit at a low amount.  The more new credit you have, the lower your score will be. 

Usually any account younger than 6 months is considered a new account.

When you are dealing with your FICO score, just focusing on the above metrics will really help you increase your score and qualify for better rates. 

Will Getting A Secured Card Help My Credit

Getting a secured card can really help increase your credit score depending on how you use it; below we show you a few ways:

Increasing Your Credit Mix

As you can see from above, credit mix is one of the factors that can help improve your credit score. 

Of course, this means having a credit card, a store card, a personal line of credit, and an auto loan are all different mixes of credit.

The more variety of credit you have on your report, the better your score can become. 

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The Candy Bar Method

The Candy Bar method is a concept that my husband came up with.

Ideally, when your secured credit card arrives, you want to start using it. 

However, you don't want to use it for things that are expensive or pricey, the goal is to only use a small amount and then pay it off.

This is where The Candy Bar method comes into play. 

You will simply buy 1 piece of candy every month and then pay it off 3 days later. 

Not only will this show a history of good payments on your credit report, but you also have a reason to buy candy every month. 

History Of On-Time Payments

On-time payment is a huge factor when it comes to computing your credit score, and the more of them you have, the better your score. 

Having a positive payment history is one of the few items you can control when it comes to your credit score.

It is essential that you only take out a loan if you can afford the payments.

Quick Tip:

When dealing with a Secured Credit Card you get to choose your own credit limit, you should start with a good amount.

Increasing Your Available Credit

As a revolving loan, a secured credit card will be counted when it comes to your credit utilization ratio. 

This means you will get to see an increase in your credit score because you would have just increased your available credit when you add a secured card. 

The higher your available credit the better off your score will be. 

While most secured cards only require a $200.00 initial deposit, if you can put more; I would recommend going for it.

Can A Secured Card Hurt Your Credit?

Yes, if you don’t respect your secured credit card it can wreak havoc on your credit score, some things you can’t do anything about and others you should avoid at all costs:

Decreasing Your Average Age Of Accounts

When you get approved for new credit, and it finally reaches your credit report, you will see a decrease in what is known as your average age of accounts.  

Your length of credit history is another significant factor in your credit.

It is one factor of your credit that you have absolutely no control over outside of not obtaining new credit. 

Just remember when you apply for this new secured credit card, once it hits your credit, you will probably be dinged for having a lower average age of accounts. 

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Increase Your Credit by 100+ Points

In a recent study at Credit Knocks, we found that *48% of clients who used a credit repair company got a credit score increase of 100+ points.

Consultation is quick, easy, and free.

Hard Inquiry On Your Credit

Whenever you submit an application for any type of credit, the lender is going to check your credit for approval. 

Probably 80% of the time, you are going to get a hard pull on your credit, especially when you are looking into a secured credit card. 

Inquiries are one of those things that will negatively affect your score, and usually, you see an immediate change in your score when you get one.

Now, the good news is that they only last on your credit report for 2 years, but FICO only considers them for up to 1 year.

That is why it is best to just apply with as many lenders as possible on the same day.

This means everything will fall off at the same time, and you can get the best rate.

There are some secured cards, like the open sky that doesn't do a hard inquiry.

Missing Your Payments

Yes, here it is again, the age-old “don’t miss any payments” verbiage.  

But, the truth is that people just sometimes forget to make their payments or situations happen that don’t allow you to make your payments.

If this happens, and you get a 30 day late on your credit report, it’s going to really mess your credit up for at least 2 years.

Whatever you do, don’t miss any payments, you can use the candy bar method above to make sure this never happens.

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When To Get A Secured Credit Card?

For many people, getting a secured card will be either their first opportunity for credit or their second chance, below I go over when you should get a secured card. 

You're A First Time Home Buyer

If you are about to buy your first home and don't have any established credit you are going to find the tax almost impossible.

Usually lenders require that you have at least 3 tradelines (accounts) on your credit report before the will approve you for a loan.

Getting a few secured cards is the fastest way to achieve this; however, you will want to do this at least 6 months before you start looking for a home.

In a recent study, we found that *48% of paying, credit repair clients got a 100+ credit score gain or more.   If you don't have serious time to devote to your dispute letters, we recommend you hire the pros to help.  Check out our #1 choice for professional credit repair. 

You Had A Bankruptcy

If you have had a bankruptcy (bk) in the past you are going to find it very hard to obtain new credit.

Especially if it has been less than 2 years since you had the BK, a secured credit card will probably be your only option.

You are going to want to do your very best to pay everything on time and seriously give yourself 2 years of building your credit before you start trying to obtain more credit.

You Have No Credit

If you have absolutely no credit at all, then a secured credit card is a great option for you. 

Not only can you establish a new account, it will also help the credit reporting agencies give you an actual credit score. 

You will start building your average age of accounts and also have low credit utilization. 

Starting off with no credit is awesome because everything starts off even, it's your job to keep them that way.

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Low Credit Score?

Get a free consultation with a credit repair expert to see how much they can help your credit score.

It's quick, easy, and free.

You Have Bad Credit

Having bad credit and trying to re-build it is one of the main reasons you would need a secured credit card. 

While there are other options, a secured card is one of the most rewarding because not only do you get an actual credit card, you are also able to reverse bad credit mistakes.

A secured card is going to report all of your on-time payments to all three credit reporting agencies. 

If you have been trying to increase your score to qualify for a home loan or auto loan or get an apartment then using secured cards to grow your credit is essential. 

You don't have to keep bad credit, especially with secured cards out there. 

Wanna Know the Easy Way to Repair Your Credit?

In a recent study, we found that *48% of paying, credit repair clients got a 100+ credit score gain or more.   Get help from the pros! ​Check out our #1 choice for professional credit repair.

Taking Action

The primary purpose of a secured credit card is to help you establish or re-build your credit. 

There is absolutely no reason to wait around if you need to grow  your credit and if you follow the above steps it will make getting a secured card a much better experience. 

To get thing started you can check out our credit cards that don't require a credit check

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