Secured Credit Cards: Establishing Credit without a Credit Score

Credit Cards

Are you among the many individuals in India who lack a credit history and struggle to secure credit cards or loans? Some teens don’t even know the meaning of CVV. A good credit score is essential for accessing a wide range of credit cards, obtaining quick loan approvals, and providing basic knowledge to youngsters. 

However, you may face challenges if you’re just starting your credit journey without a credit history. In this article, we will provide valuable tips to help you build a solid credit history from scratch, focusing on secured credit cards’ significance in establishing credit without a credit score.

What are Secured Credit Cards?

Establishing a credit history becomes crucial for individuals who have never applied for a credit card or loan. A credit history is a track record of an individual’s borrowing and repayment activities, which helps lenders assess creditworthiness. However, without a credit score, lenders may hesitate to extend credit, making it challenging to build a credit history.

A credit card without credit score is crucial in helping individuals without a credit score build their credit history. These cards are specifically designed for beginners or those with limited credit experience who may not be eligible for unsecured credit cards. Unlike unsecured credit cards, secured ones require collateral or a security amount, typically a fixed deposit.

The credit limit of the secured card is typically equivalent to a percentage of the deposit. Individuals can gradually establish a credit history by using the secured credit card responsibly and making timely payments.

Applying for a Secured Credit Card

If you are new to credit or do not have a credit score, applying for a secured credit card is an excellent starting point. Secured credit cards provide a valuable opportunity to showcase your creditworthiness and demonstrate responsible financial behavior. You can gradually establish a positive credit history by utilizing a secured credit card and making timely repayments.

When utilizing a secured credit card, monitoring your credit utilization ratio (CUR) is essential. This ratio represents the proportion of the credit limit that you utilize. Maintaining a CUR within 30% to 40% of your credit limit is advisable to avoid appearing credit-hungry. Consistently maxing out your card or having a high CUR regularly may negatively impact your credit score and portray you as financially irresponsible.

How Does a Secured Credit Card Helps You Build Your Credit?

Paying your secured credit card’s monthly EMIs (Equated Monthly Installments) in full and on time is crucial for building a healthy credit score. Your repayment history significantly influences your credit score, and any missed or delayed payments can have a drastic negative impact. Ensuring prompt repayments establishes a reliable track record that showcases your financial responsibility.

After approximately one year of diligently using a secured credit card, consider applying for an unsecured one. This transition is essential as it allows you to avoid the collateral obligation of secured cards. Unsecured credit cards offer higher credit limits and additional perks, providing greater financial flexibility and rewards.

Benefits of Secured Credit Cards in India

Access to Credit: A credit card without credit score allows individuals without a credit score to access credit facilities. By using the card responsibly and making regular payments, individuals can demonstrate creditworthiness and gradually establish a credit history.

Building Credit History: Secured credit cards enable individuals to build a positive credit history over time. Lenders report credit card activity to credit bureaus, which helps generate a credit report and calculate a credit score. Responsible credit card usage, such as making timely payments and maintaining a low credit utilization ratio, can contribute to a strong credit history.

Financial Discipline: Secured credit cards can foster financial discipline and responsible money management. Cardholders must make payments on time and manage their credit utilization effectively. These practices can lay the foundation for sound financial habits, improving financial stability in the long run.

Upgrade Opportunities: After using a secured credit card responsibly for a certain period, individuals may become eligible for an upgrade to an unsecured credit card. Unsecured credit cards do not require collateral and often offer higher credit limits, additional perks, and rewards programs. This transition from a secured to an unsecured credit card signifies progress in building credit and can provide access to more favorable credit terms.

Convenience and Security: Secured credit cards offer the same convenience and security features as traditional credit cards. Cardholders can use them for online and offline transactions and enjoy added security measures, including CVV verification, to protect against unauthorized usage.


Building a credit history takes time and perseverance. For those people, especially those who don’t know what is the meaning of CVV or lack a credit score, secured credit cards are an effective way to establish creditworthiness. Individuals can successfully navigate the credit landscape by adhering to responsible financial practices. Giving you the basic knowledge of maintaining a low credit utilization ratio, making complete and timely payments, and transitioning to unsecured credit cards after building a solid credit history. 

Remember, establishing and maintaining a good credit score requires dedication, but the rewards are worth the effort.