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.
Here are a few steps that you can use to turn your credit around, or to establish credit if your credit is insufficient:
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) 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 all of the credit information on your credit report and make sure it is complete and accurate. If you find that some of the bad credit references are wrong, you should dispute these in writing – instructions for writing a dispute will be included with the report. Accounts that aren’t yours, old or inaccurate data – dispute them all.
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) 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.
Author: Michelle LefeauxThis author has published 3 articles so far.