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Learn How to Increase Your Credit Score with A Secured Credit Card
Posted on Sunday, October 6th, 2024 | By IndusInd Bank
Summary: Effectively managing your secured credit card by selecting the right card, keeping a low balance, and ensuring timely payments can lead to a higher credit score.
A good credit score offers you access to a wide range of financial opportunities. Whether you want to buy a home, acquire a car, or secure a personal loan, your credit score is essential for determining your eligibility and the terms you will be offered. However, improving or repairing your credit score might seem overwhelming, especially if you are beginning from scratch or trying to bounce back from a financial setback. But there’s a valuable tool that can help you improve your credit score: a secured credit card.
Understanding Secured Credit Card
A secured credit card requires you to make a cash deposit that serves as collateral for your account. It offers security to the card issuer in case you lack the funds to make payments. The amount you deposit determines the credit limit on your credit card. Secured credit cards are often used by those who have poor credit history or low credit scores to improve or rebuild their credit.
Several banks provide credit cards that are secured by fixed deposits. It enables you to obtain a credit card using your fixed deposit as collateral.
Essential Tips for Enhancing Your Credit Score with a Secured Credit Card
| Choose the Right Card | Prioritise a secured credit card that reports your account activity to credit agencies, these agencies compile credit reports that influence your credit scores. Choose a secured credit card that offers rewards and allows you to upgrade to an unsecured card. |
| Make Timely Payments | Timely payments are essential for building a solid credit history. This significantly affects your credit score. Make sure to pay your monthly balance on time. Schedule payment reminders or set up automatic payments to ensure you do not miss any due dates. |
| Keep Your Balance Low | Keep your credit utilisation ratio low. This ratio reflects the percentage of your available credit limit. Make sure your balance stays at or below 30% of your credit limit. |
| Use the Card Regularly | Make small purchases that can be paid off each month to demonstrate consistent payment behaviour. Avoid keeping the credit card inactive for long periods. |
| Monitor Your Credit Score | Keep track of your credit score to see how you are progressing or to look for signs of fraud. Credit monitoring services offer access to free credit reports and scores. |
| Upgrade to an Unsecured Card | With consistent usage of your secured credit card, you may be eligible for an unsecured card with better terms and benefits. Some issuers may automatically convert your secured card based on your credit behaviour. |
Apply Online for a Credit Card with IndusInd Bank
Discover the perfect credit card for your lifestyle and financial needs with IndusInd Bank. Whether you want best-in-class reward programmes, cashback offers, insurance benefits, or travel perks, we have a card for you. Here are some of the noteworthy features and benefits our credit cards offer:
- High on Rewards: Earn reward points for every transaction, with additional reward points for reaching spending milestones
- Cashbacks: Receive cashback on shopping, groceries, dining out, flight bookings, movie tickets, and more
- Lifetime Fee Waivers: Choose from a range of credit cards with no joining and annual fees
- Rewards that Never Expire: Redeem or convert reward points to cash or to pay off your credit card debt
- Airport Lounge Access: Get complimentary access to airport lounges at various domestic and international airports
- Fuel Surcharge Waiver: Benefit from waived fuel surcharges at petrol stations across India
Apply online for an IndusInd Bank credit card today and start enjoying these perks tailored to your lifestyle!
