How Much Will a Secured Credit Card Raise My Score?

Do you have a credit score that you are trying to reach? If so, you are probably wondering how far a secured credit card can get you towards reaching that goal. 

While the exact score rise will depend on the individual makeup of your credit and overall financial well-being, you can expect something close to a 200 point increase to your credit score over twelve months. 

To help you figure out exactly what to expect, we will explore the different factors that impact your credit score as well as how a secured credit card can help and how to choose the best card for your unique situation. 

How Much Will a Secured Credit Card Raise My Score? 

If you properly manage your secured credit card, you could see a 200 point increase to your credit score within 12 months. If you have bad credit, a score in the 500s or below, opening three secured credit cards and a credit builder loan can get you into the 700s within 12 months. 

The potential for a credit score increase will only happen if you make on-time payments every month and if you keep your credit utilization ratio low. You’ll also need to do a good job of managing the other aspects of your credit as well. 

How much your credit score will increase and how fast will depend on what your credit score looks like and the factors that are currently bringing your score down. 

For those starting with no credit, credit score gains may initially be fast and substantial. In as little as 3 months, you can go from having no score to a credit score in the 600s. 

For those with poor credit, improvements to your credit score may be slower at first, but by the 12-month mark, the change will be much more significant. 

On the other hand, if you fail to manage this secured card properly, or poorly manage the other credit lines on your credit reports, your credit score may not improve at all. 

How Do Secured Credit Cards Help Build Credit? 

A secured credit card account can help you build your credit in multiple ways. 

For instance, let’s say that you are just starting out on your credit journey and have only a loan account reporting (i.e. student loan). Qualifying for an unsecured credit card may be difficult, so you decide to start with a secured card. 

You put a $500 security deposit down in exchange for a $500 credit limit. 

If you pay your statement balance in full and on time every single month, this will provide a boost to the payment history portion of your score, which has the biggest impact on your credit score (35%). 

Next, you decide to only charge your $50 water bill to the card each month. This gives you a utilization rate of only 10%, which is the ideal level for maxing out the credit utilization part of your score. 

For each month you have the secured credit card account open, you’ll be building your length of credit history. Also check out our article, How Long Does It Take to Build Credit With a Secured Credit Card? for more information on the timeline for this.

Since you already have an installment loan, adding a revolving account (secured credit card) will improve the credit mix portion of your score. 

Now, if you have bad credit, how a secured credit card can help your credit score changes a little bit. 

Why do you have bad credit?

If you are carrying too much debt, a secured credit card can help your utilization rate, which will improve your score, but you can supercharge your progress by also working on paying down your existing debts. Aim for a utilization rate of 10% or less for best results. 

When you’ve missed a monthly payment on a bill or credit line, it can really damage your score. And these late/missed payments or collections will, unfortunately, remain on your credit report for a while. 

By paying your new secured credit card statements on time every month, as well as all other credit lines, you will be able to build your credit score back up. 

Now, let’s look at the worst-case scenario for a minute. 

Your bad credit comes from a bankruptcy, where the result was the closure of all of your existing accounts. 

When it comes to your credit, you’ll need to start over from scratch and with your bad credit history, you’ll likely find it difficult to get banks to trust you. So, how do you build credit fast? 

Like we hinted at above, a good solution would be to open one credit-builder account and three secured credit cards. These are products that you can easily qualify for even with bad credit, and when used properly, this method can get you to a good credit score within one year. 

What to Keep in Mind When Considering a Secured Credit Card?

Before opening a secured credit card account, there are a few things that you should consider. 

The first is whether or not a secured credit card is the right choice for you and your credit score. If you’re unsure what a secured credit card is or want to know more about it, take a look at our What Is a Secured Credit Card? or Secured vs. Unsecured Credit Cards articles for more information.

What is your current credit score? Why are you trying to raise your credit score? What are the current factors that are negatively impacting your credit score? 

The answer to these and other questions can help determine whether or not a secured credit card is the right course of action. 

If, for instance, you already have good credit and you are looking for a small boost, then opening a secured credit card is not the best idea. You can qualify for unsecured credit cards, so you don’t need a secured credit card.

If you have no credit, then opening a secured credit card is a great option for helping