Obtaining good credit when you don’t have any at all can be a daunting task. If you have credit but it’s a disaster it can be even worse. There are a lot of reasons why you might have bad credit – bankruptcy or divorce just to name a few – but you can always begin to rebuild your credit, and Prepaid Credit Cards can play an important role in doing just that.
Check out these steps that will help you turn bad credit or no credit at all into good, solid credit:
1) Open checking and savings accounts. Credit agencies and banks need to know that you have both. A savings account shows them that you are thinking and planning for the future, and a checking account shows them that you have the tools available to pay your bills responsibly.
2) Request a copy of your credit report. If you’re young, or if you are new to the United States you may not have a credit history on file. If you’ve had credit problems in the past then those problems will be reflected on your credit report. There are three major credit reporting agencies: TransUnion, Equifax and Experian, and all of them will provide you with a free copy of your credit report once per year upon request. You can make the request on-line; search on Google for “credit report” and find one that is free and with no hidden charges.
3) Make sure all of the personal information on your credit report is accurate and complete. You may find that some of the basic information is incorrect, such as your phone number, address or Social Security number. Review all of the basic information on your report, and if you find errors correct them by writing to the issuing credit bureau.
4) Read your credit report carefully and correct any errors in account information. Credit reports often contain errors – accounts that aren’t yours, or old and out of date information. You can dispute these errors in writing to the credit bureau that issued the report Make sure these are correct – if they’re not, send a written request to the credit bureau that issued the report and have them correct it. Dispute anything that is incorrect or looks suspicious.
5) Apply for a secured credit card. Secured credit cards or “Prepaid Credit Cards” work just like secured loans. Anyone can get one regardless of credit history. The issuer will ask that you deposit a small amount of cash into an account and then they will issue your credit card with a credit limit close to your deposit amount. By far the easiest way to shop for a prepaid credit card is on-line.
6) Use your new card wisely and responsibly. Don’t charge any more on your new card than you can pay off completely every month, and make sure that you pay your bills on time, every time. Once you have demonstrated your ability to pay diligently for twelve or so months, call the issuer, make sure that they are reporting your good credit to the credit agencies, and request that your account be changed to a standard account.
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.
