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How Long Does It Take for a Secured Credit Card to Become Unsecured?

Last Updated: May 17, 2024
4 min read

Key points about: graduating from a secured credit card to an unsecured card

  1. Building a credit history with your secured credit card may help you graduate to an unsecured card.

  2. Monitor your credit report to find any issues that may hurt your credit score.

  3. Your credit card issuer may graduate you to an unsecured card automatically, but some card issuers don’t offer graduation from a secured to an unsecured card.

Getting a secured credit card can be a valuable option to help build your credit history. By setting up a secured credit card account, you use a small refundable cash deposit to build your credit history.
 
With some creditors, you could potentially get approved to “graduate” to an unsecured credit card. Graduating means that you keep your card, but your security deposit is returned so that your credit card becomes an unsecured credit card.

So, what does it take to graduate from your secured credit card?

How to graduate from a secured to an unsecured credit card

Secured credit card graduation depends on your credit card issuer and on demonstrating that you can be trusted with more responsibility. Credit card issuers will look at your secured credit card usage for a period of time to determine if you’re managing your credit responsibly.

 

Whether you can graduate from a secured credit card to an unsecured card can vary among credit card issuers. With some that allow for graduation, how long it takes can depend on a few factors, including where your credit score was when you got the secured credit card and the policies of that specific credit card issuer.

Did you know?

With the Discover it® Secured Credit Card, you can upgrade to an unsecured card after six consecutive on-time payments and six months of good status on all of your credit accounts.1 Some secured credit cards may not offer a graduation option. Instead, you'd have to apply for a new unsecured card.

Stay on top of your credit score

Your FICO® Score2 is one of the factors that many credit card issuers may look at when deciding whether you’re ready to graduate from your secured credit card. Hopefully, your secured credit card usage has made a positive impact on your credit.

According to myfico.com, your FICO® Score (which ranges generally from 300 to 850) is determined by evaluating five categories, weighted in the following percentages for the general population:

  • Payment History, approximately 35%: How long a track record you have of paying your past credit accounts on time.
  • Amounts Owed, approximately 30%: How much total debt you owe and the amount of available credit you're using.
  • Length of Credit History, approximately 15%: How long you have been borrowing money.
  • Credit Mix, approximately 10%: What different types of debt you have, such as a mortgage, installment or car loans, retail accounts, and credit cards.
  • New Credit, approximately 10%: How recently you have applied for new loans or credit cards.

If you're building credit history for the first time, you probably don’t have a lengthy credit history or much of a credit mix, so this means that the other factors—like your payment history—are even more important to your FICO® Score.

Payment history is important in calculating your FICO® Score. Paying your bills on time every month that you have your secured credit card, and managing your secured credit card account responsibly as well as all your other loans, can help you graduate to an unsecured credit card.

Manage other credit accounts responsibly

Along with paying bills on time for your secured credit card account, you also need to manage the rest of your finances responsibly. If you have any other credit card accounts, debts, loans, or monthly bills, make sure to pay those bills on time. To graduate to an unsecured credit card, your overall financial life needs to be in good order—not only your secured credit card account.

For example, say that you have a Discover it® Secured Credit Card and a credit card from a different bank or issuer, if you consistently make the required payments for your Discover it® Secured Credit Card on time, but miss a payment on your credit card with the other issuer, your missed payment could affect your ability to graduate from a secured to an unsecured card with Discover.

This is because Discover looks at the bigger picture of your entire financial history across all of your accounts when deciding whether you're ready to graduate to an unsecured card—not just your history of paying your Discover bills.

Pay your card’s minimum payment every month

Sometimes, when money is tight, people skip a payment on a credit card. That’s not a good idea. Missing a payment (especially if you fall behind by 30 or more days) can cause lenders to classify you as a higher-risk borrower, and this may delay your graduation from a secured credit card to an unsecured card.

To avoid falling behind on your credit-building goals, make sure that you're paying at least the minimum payment on each of your credit accounts every month. Even if you can't currently afford to pay more than that, just paying the minimum—on time—will help you build credit history by establishing a positive payment history, and should put you on the right financial path.

See if you're pre-approved

With no harm to your credit score3

Limit how many credit accounts you open

Limiting the number of accounts you open in a short period can help your credit score as every hard credit inquiry can affect your credit score.

Monitor your credit until you graduate from a secured to an unsecured credit card

If you regularly review your credit report, it may help your credit score if you spot something incorrect. The FTC notes that the three major credit bureaus—Equifax®, Experian®, and TransUnion®—allow you to check your credit report once a week for free at each of the agencies. For example, if your report says you missed a payment, but you have a record of making the payment on time, you’d want to address the inaccuracy. If you see an error, you should submit a dispute letter to the credit bureau as soon as possible.

By paying your secured credit card on time, staying within the credit limit, and regularly making at least the minimum payments on time on any credit accounts that you have, you may be able to maximize your chances of graduating to an unsecured credit card.

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  1. Getting your deposit back: Monthly reviews start your seventh month as a customer. We will refund your security deposit if you have made all payments on time for the last six consecutive billing cycles on all your Discover accounts including any loans, and you've remained in "good status" on all credit accounts you are responsible for whether they are Discover accounts or not. "Good status" means: (1) your credit report shows no delinquencies, charge-offs, repossessions, or bankruptcies for the six months prior to our review; and (2) your Discover secured card is not in a prohibited status at the time of our review, including, but not limited to: closed, revoked, suspended, subject to tax levy, garnishment, deceased, lost/stolen, or fraud. Monthly reviews may be delayed if you change your payment due date. We typically process your refund in 2-3 business days based on your delivery preference. If you close your account and pay in full, we'll return your deposit within two billing cycles plus ten days.

  2. FICO® Credit Score Terms: FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries.

    Discover Financial Services and Fair Isaac are not credit repair organizations as defined under federal or state law, including the Credit Repair Organizations Act. Discover Financial Services and Fair Isaac do not provide “credit repair” services or assistance regarding “rebuilding” or “improving” your credit record, credit history or credit rating.

     

  3. There is no hard inquiry to your credit report to check if you’re pre-approved. If you’re pre-approved, and you move forward with submitting an application for the credit card, it will result in a hard inquiry which may impact your credit score. Receiving a pre-approval offer does not guarantee approval. Applicants applying without a social security number are not eligible to receive pre-approval offers. Card applicants cannot be pre-approved for the NHL Discover Card.

  • Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.