Different transforms are compared to extract bit sequences used in secret-key binding for highly-correlated physical-identifier outputs. A set of transforms that perform well in terms of decorrelation efficiency is applied to ring oscillator (RO) outputs to improve the reliability and uniqueness of the extracted sequence, information leakage to an eavesdropper about the secret key and RO outputs, secret-key length, and hardware cost. Low-complexity error-correction codes used in combination with the transform-coding algorithm and fuzzy commitment scheme are proposed for a realistic block-error probability constraint to illustrate a complete secrecy system that binds secret keys to noisy and correlated physical identifiers with better secret-key and privacy-leakage rates than existing methods.