If you have no credit or bad credit and you’ve tried in the past to correct it you know what a difficult task that can be. There are plenty of reasons why you might have bad credit – divorce or bankruptcy to name just two. No matter what the reason, you can start to rebuild your credit at any time, and Prepaid Credit Cards can help you do it faster.
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) 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 Credit reports often contain errors – accounts that aren’t yours, or old and out of date information.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) 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 insufficient credit can haunt you at times when you need the trouble the least. Using the steps outlined above you can begin today to establish good credit so that it will be available when you really need it.
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