Getting a secured credit card can be a valuable option to help build your credit. By setting up a secured credit card account, you use a small refundable cash deposit — the minimum amount can vary by issuer — to build your credit history and create a stronger foundation for your financial future.

You will use your secured credit card — which has a total credit limit equal to the amount of your refundable deposit — and with some creditors, you could potentially get approved to “graduate” to an unsecured credit card. In this case, “graduating” means that you keep your card, but your security deposit is returned so that your credit card becomes an unsecured card with a credit line.

Some major credit cards report your payment history on the secured card to the three major credit bureaus, helping to establish your credit history.

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

  1. Know How to Graduate From a Secured to an Unsecured Credit Card
  2. Watch Your FICO® Score
  3. Stay Within Your Credit Limit
  4. Manage Other Financial Accounts Responsibly
  5. Pay(At Least) the Minimum Payment Every Month
  6. Other Ways to Help Your Credit on Your Way to Discover it® Secured Credit Card Graduation 

1. Know How to Graduate From a Secured to an Unsecured Credit Card

Secured credit card graduation is a bit like graduating from high school or college: You need to follow key guidelines and are evaluated on how well you perform on a few important criteria so that over time you can prove 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 spending responsibly.

How long will it take before you can graduate to an unsecured credit card? It could be several months to a couple years depending 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. Some secured credit cards do not offer the option of graduating to an unsecured card, so make sure to check with the issuer before filling out the application.

Please keep in mind: Following the tips below is not a guarantee that you will graduate to an unsecured credit card within a certain amount of time or at all. Every individual’s financial situation is different and this is not an all-inclusive list of possibilities and circumstances. But, following these guidelines may help you avoid the mistakes that can cause some people to fall short of their credit-building goals.

Here are the key guidelines that are considered by many card issuers when deciding whether you qualify to graduate from a secured credit card to a regular unsecured card.

2. Watch Your FICO® Score

Your FICO® Score 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.

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

If you are building credit for the first time, you probably do not 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.

Since your payment history carries the most weight in calculating your FICO® Score, being late with credit payments can be a big problem. Paying your bills on time during every month that you have your secured credit card, and managing your secured credit card account responsibly, can help keep your FICO® Score under control and qualifying to graduate to your next credit card. See more details and terms about FICO® Scores at the bottom of this article.

3. Stay Within Your Credit Limit

One of the most important factors in managing your secured credit card account responsibly is making sure that you don’t exceed your credit limit, miss payments, or incur extra interest and fees.

For example, say that your credit limit on your secured credit card is $500, you charge $500, and then miss a payment or don’t make the minimum payment. If  your late fee was $25 and your interest was $10… you now owe $535, which is over your $500 limit. Behaviors like missing payments, being charged late fees, and spending over your credit limit are what can keep you from graduating to an unsecured credit card.

4. Manage Other Financial Accounts Responsibly

Along with paying bills on time for your secured credit card account, you also need to manage the rest of your financial life responsibly. If you have any other credit card accounts, debts, loans, or monthly bills, make sure to pay those bills on time. To get approved to graduate to an unsecured credit card, your overall financial life needs to be in good order — not only that specific 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 will affect your ability to graduate from a secured to 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 are ready to graduate from your unsecured card — not just your history of paying your Discover bills.

5. Pay (At Least) the Minimum Payment Every Month

Sometimes, when money is tight, people feel that they can afford to 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. This can cause big damage to your FICO® Score.

To avoid falling behind on your credit-building goals, make sure that you are paying at least the minimum payment on each of your credit accounts every month. Even if you cannot currently afford to pay more than that, just paying the minimum — on time — will help you build credit by establishing a positive payment history, and should help you avoid the most damaging hits to your credit report.

But, remember, following the advice in this article is not a definitive guarantee that you will graduate from your secured credit card in a certain amount of time. Every secured cardholder is evaluated based on their unique financial situation and credit history.

However, if you follow these simple guidelines — 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. Plus, in the meantime, you’ll be establishing the sound financial habits that will serve you well in the future.

6. Other Ways to Help Your Credit on Your Way to Discover it® Secured Credit Card Graduation

There are other habits you can start that may help your credit score as you work to make the switch from a secured credit card to an unsecured card.

In addition to regularly meeting your minimum monthly payment, there are several other ways to help your credit score on the path to making a secured Discover card upgrade. Your payment history is the most important factor as it makes up about 35% of your FICO® Score.

Paying down credit card debt, or making more than the minimum monthly payment, can further help your credit score. Your amounts owed, including your revolving utilization ratio is the second-biggest factor of your FICO® Score, making up about 30%.

Opening new credit accounts only when needed can positively impact the length of your credit history, which makes up about 15% of your FICO® Score.

New credit and credit mix each account for about 10% of your FICO® Score. Limiting the number of accounts you open in a short period can help your credit score as every hard credit inquiry can cause your credit score to decrease. Having a balance between installment debt, like loans, and revolving debt, like credit cards, can help your credit score.

Regularly reviewing your credit report to avoid errors might also help your credit score if you spot something incorrect. The Fair Credit Reporting Act (FCRA) requires the three major credit bureaus — Equifax, Experian, and TransUnion — to provide a free copy of your credit report annually upon your request. If you see an error, you should submit a dispute letter to the credit bureau as soon as possible.

Following these tips can help you become a secured credit card graduate.

Published April 24, 2019.

Updated June 2, 2021.

FICO® Credit Score Terms: Your FICO® Credit Score, key factors and other credit information are based on data from TransUnion® and may be different from other credit scores and other credit information provided by different bureaus. This information is intended for and only provided to Primary account holders who have an available score. See Discover.com/FICO about the availability of your score. Your score, key factors and other credit information are available on Discover.com and cardmembers are also provided a score on statements. Customers will see up to a year of recent scores online. Discover and other lenders may use different inputs, such as FICO® Credit Scores, other credit scores and more information in credit decisions. This benefit may change or end in the future. FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries.

If you prefer not to receive your FICO® Credit Score just call us at 1-800-DISCOVER (1-800-347-2683). Please give us two billing cycles to process your request. To learn more, visit Discover.com/FICO.

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