Credit cards affect your credit history differently depending on what type they are
Not every card you carry reports to the credit bureaus. Secured cards, unsecured cards, and store cards all work differently — some build your credit score, some don't report at all, and some can actually hurt it if you're not careful. The card type matters because your credit history is what lenders look at when you explore for a mortgage, car loan, or apartment.
The core difference is whether the card issuer reports your payment history to Equifax, Experian, or TransUnion. If they don't report, the card won't help your credit score, even if you use it responsibly for years. If they do report, every payment you make — on time or late — becomes part of your permanent record.
Key Takeaways
- Unsecured cards from major issuers (Visa, Mastercard, American Express) almost always report to all three credit bureaus and are the fastest way to build credit history.
- Secured cards require a cash deposit but report like regular cards, making them the main option if you have no credit or poor credit.
- Store cards and gas cards may not report to all three bureaus, so check with the issuer before opening one expecting it to help your score.
- Authorized user accounts on someone else's card can help your credit if that person pays on time, but hurt it if they don't.
- Prepaid cards and debit cards never report to credit bureaus, so they don't build credit history no matter how responsibly you use them.
Unsecured cards: the standard option that reports to all three bureaus
An unsecured credit card is what most people think of when they hear "credit card." You don't put down a deposit. The issuer extends you credit based on their assessment of your risk. Visa, Mastercard, American Express, and Discover cards from banks and credit unions almost always report to all three credit bureaus — Equifax, Experian, and TransUnion.
This means every payment you make gets recorded. Pay on time, and your score goes up. Miss a payment, and it stays on your report for seven years. If you have no credit history yet, an unsecured card from a mainstream issuer is the fastest path to building one, but you'll need to meet their approval standards first. That usually means a Social Security number, a job or income, and either some existing credit or a co-signer.
The catch: if you don't may have access to for an unsecured card, you can't force your way in by opening one anyway. The issuer either approves you or doesn't.
Secured cards: deposit-backed cards that report like regular cards
A secured credit card requires you to put down a cash deposit, usually between $200 and $2,500. That deposit becomes your credit limit. You use the card like a regular card, make monthly payments, and the issuer reports your activity to all three credit bureaus.
Secured cards exist specifically for people rebuilding credit or starting from zero. Because the issuer holds your deposit as collateral, they take on less risk, so approval is much easier than for an unsecured card. After 6 to 24 months of on-time payments, many issuers will convert your secured card to an unsecured one and return your deposit.
The deposit is not a fee — it sits in an account and earns a small amount of interest. You get it back when you close the card or graduate to unsecured status. The real cost is the annual fee, which varies by issuer. Some secured cards charge $25 to $50 per year; others charge nothing. Check the terms before you open one.
Store cards and gas cards: reporting varies by issuer
A store card is issued by a retailer — Target, Macy's, Amazon, Best Buy — and can usually only be used at that store or its partners. A gas card works the same way but for a gas station or fuel brand. These cards often come with a discount on your first purchase, which is why people open them.
The problem: not all store and gas cards report to the credit bureaus. Some report to only one or two bureaus instead of all three. Some don't report at all. If a card doesn't report, using it responsibly won't help your credit score. Before you open a store card, call the issuer or check their website and ask which bureaus they report to. If they say "none" or "we don't report to the bureaus," skip it if your goal is to build credit.
Store cards that do report typically have higher interest rates than regular credit cards — often 20% to 30% — so carrying a balance is expensive. Use them only if you can pay the full balance each month, or if the discount is worth the cost of interest.
Authorized user accounts: you build credit without opening your own card
When you become an authorized user on someone else's credit card account, that account's history may be added to your credit report. You don't need to explore or be approved — the primary cardholder adds you, and the issuer reports the account under your name.
This can help your credit quickly if the primary cardholder has a long history of on-time payments and a low balance. The account's entire history — sometimes going back years — gets added to your report. But it works both ways: if the primary cardholder misses payments or carries a high balance, your score will drop too, even though you didn't make the decisions.
Not all issuers report authorized user accounts to the credit bureaus. Check with the issuer first. Also, some credit scoring models ignore authorized user accounts or weight them less heavily than accounts you opened yourself. This matters less if you're building credit from scratch, but more if you're trying to recover from damage.
Prepaid and debit cards: they don't build credit at all
A prepaid card is loaded with money upfront and works like a debit card — you can only spend what you've put on it. A debit card draws directly from your bank account. Neither one reports to the credit bureaus, no matter how responsibly you use it.
This is a common misconception: people think that using a prepaid card carefully for months or years will build their credit. It won't. The issuer has no reason to report because there's no credit involved — you're spending your own money, not borrowing. The credit bureaus only track borrowing behavior.
Prepaid and debit cards are useful for budgeting and avoiding overdraft fees, but they're not a tool for building credit history. If you need to build credit, you need an actual credit card — secured or unsecured.
How to check which bureaus a card reports to
Before you open any card, find out which bureaus the issuer reports to. Call the customer service number on the issuer's website or check the cardholder agreement — the long document they send after you open the account. Look for a section called "Credit Reporting" or "Credit Bureau Reporting."
The issuer will tell you whether they report to Equifax, Experian, TransUnion, or all three. If they report to all three, the account will show up on all three of your credit reports and affect your score across the board. If they report to only one or two, your score will build more slowly because not all lenders look at all three bureaus.
If an issuer won't tell you, that's usually a sign they don't report at all. Move on to a card that does.
Frequently Asked Questions
Can I use a prepaid card to build credit if I make all my payments on time?
No. Prepaid cards don't report to credit bureaus because no credit is involved — you're spending money you already have. To build credit, you need a card that extends credit to you, like a secured or unsecured credit card.
If I'm an authorized user on my parent's card, will their late payments hurt my credit?
Yes, if the issuer reports the account to the credit bureaus. The entire payment history — including late payments — gets added to your credit report. You can ask the issuer to remove you if the account is damaging your score, though this takes a few weeks to process.
Do all Visa and Mastercard cards report to the credit bureaus?
Almost all do, but not every single one. A Visa or Mastercard issued by a small credit union or online bank might report to only one or two bureaus instead of all three. Check with the issuer before you open the account to be sure.
How long does it take for a secured card to help my credit score?
Most credit scoring models start reflecting your payment history after two to three months of on-time payments. Your score will improve faster if you keep your balance low — ideally under 30% of your credit limit — and never miss a payment.
If I close a credit card, does it stop helping my credit?
The account stays on your credit report for up to 10 years after you close it, and it continues to help your score during that time if the payment history was good. Closing a card does reduce your total available credit, which can lower your score slightly, but the account itself doesn't disappear.