| Study reveals that nearly 9 million people in America | | | | 5. So what about Prepaid cards? |
| have problems of bad credit. This forms about 3% | | | | You can also use a credit card that is prepaid. This |
| of the population, (over 6% of the adult population!) | | | | often a solution that many borrowers are unaware |
| of the United States. So the knowing the credit | | | | of. This, is perhaps the simplest and most effective |
| history of a person is gaining ground and necessity | | | | method for longer term improvement if you have |
| for creditors. | | | | debt discipline problems. This effectively means you |
| The fact remains if your FICO rate is below 620, | | | | will mean using a credit card to rebuild credit - a |
| people won't lend you any credit. This FICO score | | | | 'win-win' situation. Use a prepaid credit card that is |
| being low has various reasons like bankruptcy, | | | | reported to a Credit Bureau. Only a few of the credit |
| excessive debts, inability of rendering payment of bills | | | | cards regularly report to a credit bureau. So select |
| at proper time, among others. | | | | one that does so, on a regular basis. |
| However, there is a ray of hope! Your credit score | | | | One thing to note about prepaid cards is that you |
| can be improved. This can be done by maintaining | | | | must Keep a track of fees. The prepaid card |
| your potential for credit,however small it may be and | | | | companies often levy fees. Make a prior comparison |
| making it clear to creditors that you're capable of | | | | with many companies in order to secure a credit card |
| paying your debts in time, without having to having | | | | where the lowest fee is charged. Bear in mind that |
| to resort to more credit. To help you improve your | | | | some fees need to be paid for credit cards that get |
| credit there 5 basic steps below. | | | | reported to the credit bureau, which can be up to an |
| 1. Get yourself a copy of the your credit report. | | | | annual fee of$100 - But remember the purpose of |
| Then utilize the various advantages of the credit | | | | this card is to repair credit! |
| report of the government (which is free) from every | | | | |
| Bureau of the National Consumer Credit - Equifax and | | | | Check the benefits |
| Trans-Union. This will get you to the start of the | | | | Some prepaid cards are available with certain |
| process. It will give you a clear picture of your | | | | benefits, but not all of them. Some give you points |
| present rating. | | | | which can be used for free call time and other |
| 2. File an application for a credit line, which may be a | | | | activities. |
| secured or unsecured credit card. | | | | |
| 3. On getting the card, do not make blind purchases. | | | | Preventing abuse of the credit card |
| Restrict the purchases to 70 percent of limit imposed | | | | Prepaid cards have the distinct benefit that you can |
| on the credit card. i.e. if the limit of the credit card is | | | | never cross the limit, so it enables you to avoid |
| $500, use it to the extent of $350 only. | | | | interest and penalties. The implication is that if a |
| 4. Then, make sure you pay pay bills at the proper | | | | report to the credit bureau is made, it is literally |
| time, as this alone takes up 35% of the FICO score | | | | impossible to get a FICO score which is lower than |
| of yours. So this is a good base for creditors to | | | | your current score with such a card. So you can get |
| judge your creditworthiness. | | | | credit cards to rebuild credit. It only gets better! |