Re-establishing Your Credit Is Not As Hard As You Think

By Mike Wayman

If you find yourself needing to re-establish your credit, it isn’t as difficult as it seems. Following a few simple steps will help you get your credit back on track.

If you don’t have one, get a job and establish a history of work. Order a credit report from each of the credit agencies. Correct and update your information, and submit a 100 word explanation to tell your side of the story. First, pay all your bills on time. Late payments over 30 days affect your credit. Open a savings account and make regular deposits. Open a checking account and don’t bounce any checks or go below the minimum balance. Reduce the number of credit cards that you carry. Avoid bankruptcies, tax liens, and collections. Bankruptcies stay on your credit report for 10 years. Collection accounts and paid tax liens stay on for seven years, and unpaid tax liens stay on forever.

Write to your creditors requesting that they reduce your credit. Ask a family friend or relative to co-sign for a small loan to help you re-establish credit. Make your payments on time. Get a secured credit card, and make your payments on time. And last, get a credit report once a year.

Are Prepaid Credit Cards The Right Choice For You?

By Mike Wayman

In today’s economy, prepaid credit cards may seem the way to go for those who have suffered financially and now have little or no credit accounts in good standing. Making purchases online or even at some local retail outlets is difficult or impossible without a usable debit/credit card, so using a pre-paid card can alleviate the problem. There are, however, a few pitfalls to be aware of.

First, pre-paid cards must be loaded with funds before they can be used, which is why they are no risk for the issuer. They don’t trust you to pay back money you charge, they are merely issuing a card for you to back with your own funds and then spend with the use of a card number instead of cash. This may or may not be helpful, depending on your particular financial situation. Second, card issuers should be researched thoroughly because there are those who charge enormous fees for their services or who only allow limited access to your own funds once you deposit them with your card. Limited access to your own money isn’t very helpful. Lastly, there are even shady companies who pose as legitimate pre-paid card issuers who are actually dishonest scam artists who bilk consumers out of their money and then disappear.

In short, pre-paid cards might give you the ability to more easily make purchases, as long as you already have the cash for those purchases in the first place.