Secured cards and regular cards both build credit, but unsecured cards do it faster

The type of card you use matters because credit bureaus treat different cards differently when they report to your credit file. A secured credit card — one where you put down a cash deposit — reports to the bureaus just like a regular card does, but it takes longer to show results because you're starting from a lower trust position. An unsecured card (the kind most people use) reports immediately and builds your score faster, but you need some credit history to get approved. A store card or gas card reports to the bureaus too, though some store cards don't, so you have to check before you open one.

The real difference isn't the card itself — it's what the card issuer reports about how you use it. Every month, your card company tells the credit bureaus three things: whether you paid on time, how much you owe compared to your limit, and how long you've had the account. Cards that report all three of these things build your credit. Cards that don't report to the bureaus at all don't build anything, no matter how responsibly you use them.

Key Takeaways

  • Secured cards and unsecured cards both report to credit bureaus, but unsecured cards show results faster because you start with higher trust.
  • A card only builds your credit if the issuer reports to at least one of the three major credit bureaus — Equifax, Experian, or TransUnion.
  • Store cards and gas cards report to the bureaus, but some retail cards don't, so you need to confirm before opening an account.
  • The card type matters less than the payment behavior it reports — missing a payment on any card that reports will hurt your score, and paying on time on any card that reports will help it.

Secured cards: slower start, but they work from zero credit

A secured card requires you to put money in a savings account — usually between $200 and $2,500 — and that becomes your credit limit. You then use the card like any other card: you make purchases, you get a bill, you pay it. The deposit stays in the bank account untouched. After 6 to 18 months of on-time payments, the issuer converts the card to an unsecured card and returns your deposit.

Secured cards report to all three bureaus, so they do build your credit history. The catch is that you're starting from a position of lower trust — the issuer is protecting themselves with your deposit — so the credit bureaus treat the account as slightly less valuable than an unsecured account. You'll see your score move, but it will move more slowly than it would with an unsecured card. This is why secured cards are the standard choice for people rebuilding from a very low score or starting with no credit history at all.

The deposit itself does not count as credit. It's collateral. Your credit score comes from how you use the card, not from the money sitting in the bank.

Unsecured cards: faster results, but you need some credit first

An unsecured card is what most people think of as a normal credit card. You don't put down a deposit. The issuer approves you based on your credit history, income, and other factors. If you have no credit history at all, most unsecured card issuers will turn you down — they have no way to know whether you'll pay them back.

If you do get approved for an unsecured card, it reports to the bureaus immediately and your score will move faster than it would with a secured card. This is because the issuer took on more risk by approving you without collateral, so the bureaus weight the account more heavily. After 6 to 12 months of on-time payments, you'll typically see a noticeable score increase.

The tradeoff is that you need some credit history to get in the door. If you have no history at all, a secured card is usually the only option. Once you've built 6 to 12 months of history with a secured card, you can then move to an unsecured card and accelerate your progress.

Store cards and gas cards: they report, but check first

A store card is issued by a retailer — Target, Macy's, Amazon — and a gas card is issued by a gas station or fuel company. Both types report to the credit bureaus, so both can build your credit history. Store cards and gas cards often have lower approval thresholds than regular unsecured cards, which makes them useful if your credit is thin or damaged.

The catch is that not every store card reports to the bureaus. Some retailers issue cards that only track your account with them — they don't send information to Equifax, Experian, or TransUnion. If a card doesn't report, it won't build your credit no matter how responsibly you use it. Before you open a store card, call the customer service number on the back of the card or check the issuer's website to confirm that they report to at least one bureau. If they don't, the card is useful for discounts but not for building credit.

Gas cards are more likely to report than store cards, but the same rule applies: confirm before you open the account.

Cards that don't report to the bureaus

Some cards don't report to the credit bureaus at all. These include most retail store cards (not the major ones like Target or Amazon, but smaller retailers), some prepaid cards, and some cards issued by credit unions or smaller banks. Using these cards responsibly will not build your credit history because the issuer never tells the bureaus about your account.

This doesn't mean the card is useless — it might offer good rewards, low fees, or other benefits. But if your goal is to build credit, you need to know upfront whether the card reports. The issuer is required to tell you this information if you ask, and many issuers now list it on their website or in the terms and conditions.

How the card type affects how fast your score moves

The speed at which your credit score improves depends on three things: the card type, your payment behavior, and how much of your credit limit you use each month.

With a secured card, you'll typically see a score increase of 20 to 50 points after 3 to 6 months of on-time payments, assuming you also keep your balance low. With an unsecured card, the same behavior might move your score 30 to 70 points in the same timeframe. The difference comes down to how the bureaus weight the account — unsecured accounts carry more weight because the issuer took on more risk.

Store cards and gas cards move your score at roughly the same speed as unsecured cards, assuming they report to the bureaus. The card type matters less than the payment behavior. Missing a payment on any card that reports will hurt your score by 100+ points. Paying on time on any card that reports will help it, regardless of whether it's secured, unsecured, or a store card.

What happens when you switch from secured to unsecured

After 6 to 18 months with a secured card, the issuer will usually convert it to an unsecured card automatically. When this happens, your deposit is returned to you, and the account stays open with a new credit limit (usually higher than your deposit was). The account history stays on your credit report, which means you don't lose the months of on-time payments you've built up.

This conversion is a good sign — it means the issuer trusts you enough to remove the collateral requirement. Your credit score may jump slightly when the conversion happens, because the bureaus now treat the account as unsecured. After the conversion, you can keep using the card or move to a different unsecured card. Either way, the history you built with the secured card stays on your report and continues to help your score.

Frequently Asked Questions

Do I need to use the card every month for it to build my credit?

No. The card builds your credit as long as the issuer reports to the bureaus, whether you use it or not. However, if you don't use it at all for several months, the issuer may close the account due to inactivity. A small purchase every few months is enough to keep the account active and reporting.

If I have multiple cards, do they all build my credit equally?

They all report to the bureaus the same way, but the bureaus look at your total credit behavior across all accounts. Having multiple cards that report helps your score more than having one card, because it shows you can manage different accounts. However, missing a payment on any of them will hurt your score across all of them.

Does a prepaid card build my credit?

Most prepaid cards do not report to the credit bureaus, so they don't build your credit. Some prepaid card issuers now offer a "credit-building" version that does report, but you have to look for it specifically. Check the issuer's website or call customer service to confirm whether the card reports before you open it.

Can I build credit with a card that has a very low credit limit?

Yes. The credit limit amount doesn't matter — a $200 limit builds your credit just as effectively as a $2,000 limit. What matters is that you pay on time and keep your balance low relative to the limit. A $200 limit is actually easier to manage responsibly, which is why secured cards with small deposits are so effective for building credit from scratch.

What if I'm denied for an unsecured card but approved for a store card?

Take the store card if it reports to the bureaus. Store cards have lower approval thresholds, so getting approved for one when you're denied for an unsecured card is normal. Use it responsibly for 6 to 12 months, and you'll build enough history to get approved for an unsecured card later. Just confirm first that the store card actually reports to the bureaus.