Secured vs. Unsecured Credit: Which Should You Choose?

When you're building credit history, you'll encounter both secured and unsecured credit products. Choosing the right type at the right time can make your credit-building journey faster and less costly.

Secured Credit: How It Works

A secured product requires you to put up collateral — usually a cash deposit — that the lender can claim if you default. The most common example is a secured credit card, where your deposit becomes your credit limit.

• Easier to qualify for with no or poor credit history
• Requires upfront cash deposit
• Reports to bureaus just like unsecured products
• Great first step for building credit history

Unsecured Credit: How It Works

Unsecured products don't require collateral. The lender extends credit based on your creditworthiness — your score, income, and debt-to-income ratio. Most standard credit cards and personal loans are unsecured.

• No deposit required
• Typically requires a minimum credit score (usually 670+)
• Higher credit limits available
• Better rewards and interest rates for qualified applicants

Which Should You Choose?

If you're starting from scratch, begin with secured products — a credit builder account plus a secured credit card. Use them responsibly for 12-18 months. Once your score crosses 670, you'll qualify for unsecured products with better terms.

Where CredRises Fits In

CredRises membership accounts are reported as installment-type accounts, making them a great complement to a secured credit card. The combination gives you two types of positive credit history simultaneously — helping across multiple scoring factors at once.