You understand the frustration of having your application for a credit card or loan rejected due to a low credit score. Banks cannot provide credit without a high score, and you can’t raise your score without credit, so many people find themselves in a cycle of debt. A secured credit card can save your life in this situation. It’s among the most straightforward and efficient methods to fix your credit, particularly if you’re just starting or having trouble getting over credit errors.
This blog will teach you how to use secured cards properly, how they operate, and the most effective stress-free methods for improving your credit score quickly.
What is a Secured Credit Card?
A secured credit card operates the same way as a standard credit card, but with one major difference is you give the bank a refundable security deposit. This deposit (for instance, ₹10,000–₹30,000) is your credit limit. Since the bank has secured the money in advance, they are prepared to provide a card even if your credit score is very low or non-existent. Hence, it is a wonderful, secured card for beginners and individuals with a bad CIBIL history.
Eventually, if you utilise this card wisely, your credit score will increase, making you eligible for regular (unsecured) credit cards and more attractive loan offers in the future.
How a Secured Card Helps Build Your Credit Score
For the very reason of understanding the effectiveness of a secured card, let’s talk about the factors that impact your score. Your credit score is based on,
- Payment history (35%)
- Credit utilisation (30%)
- Length of credit history (15%)
- Credit mix (10%)
- Number of inquiries (10%)
A secured card plays a supportive role in all these aspects. The score shows a gradual rise by making timely payments, keeping the utilisation low, and having a clean record. This is the very reason why the financial experts usually suggest it for how to build credit history with a secured card. It’s straightforward, predictable, and friendly to beginners.
Step-by-Step: How to Improve Your Credit Score Quickly Using a Secured Card
1. Always Pay On Time
Your payment history is the factor that has the most significant influence on your score. To avoid late payments, set reminders or activate the auto-pay option. Just one late payment can significantly decrease your credit score by a few points.
2. Use Just 20–30% of Your Limit
If your credit limit is ₹20,000, a monthly spending of ₹4,000–₹6,000 is a good way to go. Borrowing support at a low level indicates to lenders that you are a responsible credit user, which is one of the factors that contribute to the credit score improvement in India.
3. Avoid Applying for Several Loans or Cards at the Same Time
Too many inquiries can be a negative factor for your score. Keep your secured card and let it help you for a minimum of six months.
4. Maintain the Card’s Usage
Let it be used every month, regardless of what you buy, even if it is just a small amount for gas or food. The active and regular repayment behaviour paves the way for how to increase the CIBIL score in no time.
5. Review Your Credit Report Daily
Look for mistakes and see how far along you are in your journey to better credit. Through disciplined use, many people see noticeable improvements within 90–180 days.
Common Mistakes to Avoid
If you do not use the card correctly, your results will be null. These mistakes should not be made,
- Paying just the “minimum due”
- Using all your credit limit
- Not paying the EMIs or delays
- Shutting down the card prematurely
Keep in mind that a secured card is an instrument effect is determined to the degree of your sagacity in using it.
How Fast Can Your Score Improve?
A lot of users notice a difference in their credit scores after 3 to 6 months, and after 9 to 12 months, a big improvement can be seen. If your priority is fast credit score improvement tips, then just go with the top three,
- Always pay the bill on time
- Use less than 30% of the credit limit
- Always pay the bill, no matter what
Stick to this strategy and see your score go up every month.
When to Upgrade to an Unsecured Card
Your bank might offer an increase to you after you have a good repayment history for 8 to 12 months. Better credit products will be open to you by then, and you’ll also get to enjoy,
- Reduced interest rates
- Higher credit limits
- Quicker approvals for loans
- Special benefits and rewards for cards
You can even decide to take your deposit back after you’ve been accepted.
Conclusion
Rebuilding or raising your credit score can be done with a secured credit card, especially if you’re new to the market or have a low CIBIL score. You may build credit and get a card that works similarly to a standard credit card by paying a refundable security deposit. Use only 20–30% of your credit limit, pay your bills on time, stay away from applying for more than one credit card, and keep the card active each month if you want to raise your credit score fast. Within three to six months, you can observe noticeable changes in your credit score and eventually move up to an unsecured card with consistent spending patterns.
