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How to Graduate From a Secured Credit Card to Unsecured

8 min read

Last Updated: February 8, 2025

Table of contents

Key Takeaways

Building a credit history with your secured credit card may help you graduate to an unsecured card.
Monitor your credit report to find any issues that may hurt your credit score.
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.

A secured credit card can be a valuable option for building your credit history or improving a relatively low credit score. To open a secured credit card, you provide a small, refundable deposit that secures your credit line. Otherwise, a secured card works like a traditional credit card. By practicing excellent credit habits—making payments on time and keeping your balance low—you may build your credit history.

After you use your secured credit card wisely for a certain time, some credit card issuers may allow you 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. You might also qualify for a higher credit limit.

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

How to graduate from a secured to an unsecured credit card

You may be able to graduate from a secured card to an unsecured credit card by maintaining healthy credit habits.

Not all credit card companies offer cardmembers the option to graduate from secured credit cards to unsecured credit cards. Some issuers might require separate applications for unsecured credit cards, which may include a new hard credit check which could impact your credit score.

Credit card issuers who do offer graduation may consider a few different aspects of your credit usage over time to determine whether you’re ready for an unsecured credit card. While specific requirements may vary, credit card companies typically want you to demonstrate consistent, responsible credit card management.

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 It’s also a rewards credit card, so you may earn cash back on eligible purchases while building credit history.

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While you can’t control what policies your credit card issuer has, you can control how you use your secured credit card account. The following behaviors may help you graduate to a regular credit card.

Pay your secured card’s minimum payment every month

Skipping a credit card payment isn’t a good idea, even when money is tight. Missing a monthly payment 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. Over time, late payments may also lead to a poor credit score, especially if you fall more than 30 days behind.

To avoid falling short of your credit goals, make sure you always pay at least the minimum payment on your secured card. Even if you can't currently afford to pay more than that, just paying the minimum—on time—can help you build credit history by establishing a positive payment history, and should put you on the right financial path.

If you have a hard time remembering your monthly payments, you may be able to set up automatic payments through your card issuer’s online banking tool. Just make sure the checking account or savings account you use always contains enough funds to cover your payment amount.

Don’t use too much of your available credit

Your credit utilization ratio refers to the total portion of your available credit currently in use. A high credit utilization ratio may indicate that you’re having trouble paying or managing your balances, which could lower your credit score and hurt your chances of graduating to an unsecured card.

To maintain a low credit utilization ratio, try to keep your balances to a minimum. Because a secured credit line may come with a low credit limit, a few pricier purchases can drastically increase your credit utilization. Repaying your balance in full whenever possible can help you maintain a low credit utilization ratio, so you can keep working toward an unsecured card.

Manage other credit accounts responsibly

While managing your secured credit card account responsibly is important, you shouldn’t neglect your other credit accounts. To qualify for unsecured cards, you’ll likely have to show that you can manage all your debts responsibly, from regular credit cards to student loans, car payments, and beyond.

For example, say that you have a Discover it^{^®} Secured Credit Card and a credit card from a different bank or issuer. If you skip payments on your other credit card in order to pay your Discover it^{^®} Secured Credit Card on time, your missed payment could affect your ability to graduate from a secured to an unsecured card with Discover.

That’s because Discover looks at the big picture, assessing your entire financial history across all of your accounts to decide whether you're ready to graduate to an unsecured card—not just your history of paying your Discover bills.

Limit how many credit accounts you open

Whether your secured credit card is your first credit account or not, you may not want to apply for a new credit line until you’ve graduated from a secured card. When you apply for a new credit account, the lender typically conducts a hard credit check. That means they review your entire credit report to make a decision about your credit approval.

Hard credit checks may hurt your credit score, especially if multiple hard credit checks occur within a short timeframe. That’s because applying for too many credit accounts at once may indicate a lack of financial stability. Plus, taking on too much credit at one time may make it difficult to manage your balances, which might lead to credit card debt.

Stay on top of your credit score

Your FICO^® Score is one of the factors that may influence whether you can graduate from your secured credit card. As you use credit accounts, lenders typically report your activity to at least one major credit bureau–Equifax^®, Experian^®, or TransUnion^®. The credit bureau then uses that information to create your credit report, which is the basis for your credit score. If you have limited credit history or poor credit, you might use a secured card as a credit builder, as long as your credit card issuer reports your activity.

According to myfico.com, your FICO^{^®} Score (which ranges from 300 to 850) is based on the following five categories, each of which influences your score to different degrees³:

Payment history, approximately 35%: Your track record of repaying your credit accounts on time.
Amounts owed, approximately 30%: Your credit utilization ratio, or the portion of your available credit currently in use.
Length of credit history, approximately 15%: How long you have been borrowing money and managing debt.
Credit mix, approximately 10%: The variety of debts you have, like mortgages, installment or car loans, retail accounts, and credit cards.
New credit, approximately 10%: How recently you’ve applied for new loans or credit cards.

If you're using your secured card as a credit builder, you may not have a lengthy credit history or much of a credit mix. In that case, other factors—like your payment history—are even more important to your FICO^{^®} Score.

Payment history is important in calculating your FICO^{^®} Score. Paying all your bills on time every month, as you manage your secured credit card well, can help you graduate to an unsecured credit card.

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The Federal Trade Commission notes that the major credit bureaus each allow you to check your credit report once a week for free. Regularly reviewing your credit report can help you correct mistakes and improve your credit score. For example, if your report says you missed a payment, but you have a record of making the payment on time, you can report the inaccuracy. If you see an error, you should submit a dispute letter to the credit bureau as soon as possible.

Using credit responsibly can help you graduate from a secured to an unsecured credit card

By paying your secured credit card on time, keeping your balances low, and regularly making at least the minimum payments on all your credit accounts, you may be able to maximize your chances of graduating to an unsecured card, like a rewards credit card. No matter your situation, responsible credit habits can help you strengthen your credit history and financial well-being.

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