Credit Card Shopping for Fun and Profit: Prepaid Credit Cards
If you have ever had bad credit or an insufficient credit history you know how difficult it can be to correct. There are a number of reasons why you might have credit problems – if you are new to the United States or are recently divorced, or have recently declared bankruptcy you probably have credit issues. No matter what the reason is, you can start today to rebuild your credit, and Prepaid Credit Cards can play an important role in establishing good credit.
Here are six steps that you can use to turn your bad or non-existent credit into good credit:
1) Open a checking and savings account at a local bank. If you don’t have these already, get them, because credit agencies want to see that you have both. Owning a checking account lets them know that you have the tools you need to pay your bills and a savings account shows that you are thinking of the future.
2) Get a copy of your own credit report. If you are new to the United States or are young you may not have a credit history on file. If you have had problems with credit in the past, those issues will probably be on the report. All of the three major credit reporting agencies – Experian, TransUnion and Equifax – will provide you with your credit report free and on-line. Just search Google for “credit report” and find one that’s free and with no hidden charges.
3) Review your credit report and correct the basic errors. They often contain really basic errors and you can get them corrected. Look for incorrect phone numbers, address (and a second address if you’ve been at your current address for less than two years), or Social Security number. If you find errors you can send a written request to the issuing company and have them correct it. Dispute anything that looks suspicious or incorrect.
4) Check credit references and information on your report and make sure it is accurate. You often can find bad credit references that are inaccurate or wrong. Look for accounts that don’t belong to you. If you find errors, dispute them by writing to the issuing credit bureau. Information on writing to correct or dispute information on your credit report will be included with the report when you receive it.
5) Shop on-line for a prepaid credit card. Secured, or prepaid credit cards are a form of secured loan. You can get one no matter how bad your credit history is. The issuer will require that you deposit a small amount of cash into an account – then they’ll issue you a credit card with a spending limit close to the amount of your deposit. Shopping on-line for a prepaid card lets you compare different cards, pick the best one and apply very easily and privately.
6) Once you have your secured credit card, make sure you use it responsibly. Only charge as much as you can pay off each month, and make sure you pay your bill on time every month. When you’ve shown a willingness and ability to handle your credit responsibly for twelve months or so other credit options including unsecured credit cards will become available to you.
Bad or unestablished credit can be a real pain when you really need credit. Using the steps described above you can start today to build good credit so you have it when you need it.
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