How Can Prepaid Credit Cards Help Me With My Credit Score?

If you have a poor credit score because you have a chronic cash flow problem due to overspending and never have enough money left over at the end of the month to pay your bills, using prepaid credit cards can help you rebuild it.

Having a good credit score is crucial in today's world. Employers will sometimes look at a person's credit score before offering them a job because they know that a person with a poor credit score will often turn into a poor employee. Landlords will almost always check a credit score before agreeing to rent an apartment to someone because they want to make sure that the person will pay their rent on time.

You must have a good credit score if you wish to obtain any kind of personal loan or a mortgage. What most people do not realize, though, is that every business they do business with on a monthly basis that sends them a monthly invoice will submit a report to the credit bureau detailing whether or not payment was received in full and on time. Failure to make even one bill payment on time can wreak havoc on your credit score.

If this has happened to you and you are wondering how you can reinstate a good credit score for yourself in a relatively short amount of time, prepaid credit cards might be the answer you are looking for. These kind of credit cards can not lead you into deeper credit problems because you pay for your purchases in advance and do not have to worry about making a payment. You simply add money to your card in advance of when you expect to make a purchase. You are not allowed to charge more than your balance holds. You are never permitted to go into a deficit situation with prepaid credit cards.

Make sure that any prepaid credit card you sign up for reports to the credit bureau, though, or your credit score will not improve at all. If it does not, all you will end up having is a glorified debit card with nothing to show for it.

Prepaid credit cards are offered by all the major credit card companies such as Visa and Master Card. If you do not wish to use prepaid credit cards but still wish to rebuild your credit score you can use a secured credit card instead.

You need not worry that the merchant you are dealing with will be able to recognize that you are using a prepaid credit card. They look just like any other unsecured credit card and it can be used in the same way.

Prepaid credit cards are ideal for teenagers who have steady income and want the convenience of having a credit card but do not have an adequate credit score to be able to succeed in getting one. These accounts can be opened up by their parents and monitored by their parents if they wish to keep track of what their teen is spending money on.