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Build Credit Score through Secured Credit Card

how to build credit score

Build Credit Score/Credit History through Credit Cards against Fixed Deposits

Have you just started working and everyone keeps on telling you how important it is to have a good credit score? But you have no idea how to build your credit score.

Don’t worry! We are here to help you build your credit score from scratch. Secured credit card is one of the easiest ways to build credit score from scratch.

If you haven’t read about credit score, click here to know about CIBIL Score.

Here are the five ways to build your credit score through credit cards.

1. Apply for A Secured Credit Card 

Do yourself a favour and get a secured credit card. A secured credit card can be availed against collateral such as fixed deposits. The credit limit of the card depends on the fixed deposit amount. Banks fix a minimum and maximum credit limit for these cards. Typically, the credit limit of a secured card is around 80% of the FD amount.

You can get a credit card against FD backed by a FD as low as Rs.15,000. Many banks offer credit card on FD to its customers. One such bank is Kotak Mahindra Bank that offers Kotak Aqua Gold Credit card to its customers. It is easy to apply and customers can apply for this card through the mobile banking app.

Getting a secured credit card is one of the easiest ways to build your credit score from scratch. With a secured credit card, you don’t have to worry about high-interest rates and fees.

2.Use The Credit Card Regularly 

Just getting a secured card is not enough. You have to use your credit card regularly to build a credit history. Aim to use your credit card at least once a month consistently. Credit cards also come with discounts and offers. Make sure that you don’t forget to avail offers and discounts that interests you.  

3. Take note of your credit utilisation ratio

it is easy to go overboard with your brand new credit card. But you need to be prudent with your spending. Keep your credit utilisation ratio under 80%. The credit utilisation ratio is the ratio that shows how much credit you have utilised. E.g. If the credit limit of your card is Rs.10,000 and you have used Rs.8,000, it means that you have 80% utilisation ratio. Using the entire credit limit may signal credit bureaus that you are credit-hungry. And, that is not a good thing.  

4. Pay your credit card bills on time 

Doing the right thing at the right time is a good habit. Paying your credit card dues on time every month can help you to build your credit score. If you have a habit of keeping things to the last day, it can become a costly affair when dealing with credit cards. So set several calendar reminders and set your credit card bill on auto-pay so that you don’t have to think about the ugly and mind-blogging fees.

It is important to pay your dues on time because lenders such as banks report credit data such as debt repayment history to the credit bureaus such as CIBIL. So, pay your credit card bills on time if you don’t want to take a hit on your credit score.

5.Apply for an unsecured credit card 

Secured card is not meant to last forever. The main purpose of a credit card against FD is to transition to an unsecured credit card. Build your credit score for a year before applying for an unsecured credit card that is not backed by any collateral. An unsecured credit card comes with a better credit limit and offers.


Building a credit history is no castle in the air. It requires discipline, patience and time. Follow these steps with religiously and you can see the results for yourself in a year.  


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