Does A Secured Credit Card Improve CIBIL Score? - World News Network

PNN
New Delhi [India], May 27: Building financial credibility takes time especially when you’re starting out or trying to recover from past credit mistakes. Many people search for practical solutions that offer structure and control without risking further damage.
If you’re looking to build or repair your credit, a secured credit card might be just what you need. You might wonder–does it help your CIBIL score? The answer lies in how you use it. It’s a simple tool but the results depend on smart usage. Here’s a closer look at how it works and the key factors to evaluate before you apply.
How it strengthens your CIBIL score
A card, secured or not, doesn’t directly “fix” a score. What matters is how it’s handled month after month. Each swipe, payment and due date forms part of a broader pattern that’s tracked and reflected in your credit report.
* Regular payment history creates a positive track record: Timely repayment is one of the strongest signals of creditworthiness. By consistently paying your secured card dues even if they’re small, you begin building a history that proves your reliability to lenders.
* Controlled usage builds trust: Keeping your monthly spends within a sensible limit, ideally under 30% of the available credit shows financial discipline. This keeps your credit utilisation ratio healthy which also plays a role in influencing your score.
* Suitable for rebuilding from past defaults: If previous loans or cards have affected your record, a secured card allows you to restart without waiting for years. With focused usage and repayment over time, the old red marks begin to matter less as the new history takes over.
Who should consider a secured credit card?
* No prior credit footprint: If you’ve never used any credit before, traditional cards may not be easy to get. A secured one can help build your first credit score and give you access to other financial products later.
* Low score due to missed payments: Recovering from loan defaults or credit card dues can be difficult. A secured card gives you a chance to rebuild and show that your repayment habits have improved.
* Recent application rejections: Multiple rejections can further harm your CIBIL score. A secured option offers a way forward, since approval depends on your deposit and not your report.
Things to be careful about
Even though this card is designed to help, mismanagement can lead to further damage. That’s why it’s essential to treat it like any other financial responsibility.
* Avoid delays: Missed payments even on secured cards, get reported and can lower your score instead of improving it. Set reminders or auto-pay your dues to stay on track.
* Keep utilisation in check: Just because your card has a limit doesn’t mean you need to use all of it. Low usage shows restraint and boosts creditworthiness in the eyes of lenders.
* Deposit stays locked: The fixed deposit cannot be withdrawn while the card is active. Don’t treat it like an emergency fund. This is meant to secure the credit line and not offer liquidity.
* Understand fees and interest rates: Some cards may have annual fees, joining fees, or charges on cash withdrawals. Review the terms in detail before choosing a credit card. If you opt for instalments, use tools like a credit card EMI calculator to better understand the repayment process.
How long it takes to see a change
A CIBIL score doesn’t improve overnight. It reflects behaviour over time. If you manage your secured card well by paying dues on time and keeping your limits in check, you may start seeing a positive shift. This improvement could happen within six months. For more significant changes, it often takes consistent effort for up to a year or more.

The key is not just usage but regularity and discipline. Lenders and bureaus look for a pattern that indicates you’re serious about credit. That’s what slowly shifts the needle in your favour.
What happens once your score improves?
Once your CIBIL score crosses 700 or moves closer to 750, you’ll find that lenders become more open to offering better credit products. At this stage:
* You may qualify for unsecured credit cards with higher limits or better rewards.
* Personal or car loan applications are more likely to be approved at better interest rates.
* Some institutions may offer to convert your secured card into a regular card and release your deposit.
This transition is a positive sign, showing that your efforts have worked and you’ve regained good standing in the credit system.
Whether you’re new to credit or looking for a second chance, a secured credit card gives you the opportunity to prove that you can manage your finances well. The outcome depends on how you handle it–consistency, control and a long term view is what truly shape your CIBIL score. If you’re ready to commit to those habits, a secured card can support your journey to better financial credibility.
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