Prepaid credit cards also called stored value card can be ideal for individuals who are unemployed, have bad credit or difficulty obtaining an unsecured credit card. Prepaid credit cards are also excellent for individuals who have a hard time controlling their spending and prevent the individual from overspending and getting into credit card debt. If your objective is to establish or rebuild you credit over a period of time, make sure the prepaid card issuer reports cardholder transactions to the credit bureaus namely Experian, Equifax, and Trans Union.

It is very easy to obtain a prepaid credit card because there is no credit check or employment verification since the funds you will be using are yours and not that of the prepaid credit card issuer. Prepaid credit card spending limit or credit line is the amount of money you loaded to your prepaid credit card account. Prepaid credit card carries the Visa or MasterCard logo. It can be used anywhere MasterCard and visa is accepted except renting a car at certain car rental companies and setting up automatic recurring payments.

The difference between a prepaid credit card and a debit card is that the spending transactions are deducted from the amount of money you loaded to your account unlike a debit card where the money spent is subtracted from your checking account and could cause Non-Sufficient Funds (NSF) charges. The NSF charges are due to a customer drawing funds from an ATM or making purchases that exceeds the balance in their checking account. With a prepaid card this will never happen since the prepaid card holder is not borrowing any money and can only spend the amount of money loaded to their prepaid account.

With prepaid credit card there are no interest charges because you are using your own money. To obtain a prepaid credit card requires paying a setup or application fee and may charge a fee each time you load more money to your account. Some of the ways prepaid credit card can be funded is with a wire transfer and a cash deposit at certain locations approved by the issuer.

Most people may know their credit history when they look at their credit report, but 70 percent do not even have an idea that they have a credit score. And this score, which is a three-digit number, may get in the way between you and your important purchase. You may know what is in your credit report, but understanding your score is an important part of your credit health.

Why do you need to understand your score if you already know what is in your credit report? The reason is most mortgage lenders and large financial institutions will want to know your credit risk level when applying for credit. They will base their assessment and approval process for credit application on your score. FICO scores are the most-used credit scores. Though other companies have their own version of a credit score, FICO scores remain to be the most widely-used score. In fact, most people refer to their credit scores as FICO score. Other companies’ version of score may be used by lenders to view your credit, but if you know your FICO score lenders will really to see you.

So what is in a score? The highest score you can get is 850 and the lowest is 300. A good score should be at least 720 or above. If you have a score of 720, there is no need to worry about increasing the number as lenders put you in the same group of people with score of 800-820. Also, lenders find it acceptable and usually get loan approval without problem and at a minimal interest rate. However, if your number drops below 700, there is definitely a need to work on the numbers and pump it up. You will not know the overall credit health unless you know your FICO score.

What are the criteria for credit scoring? Let’s start with payment history, which takes 35 percent of the scoring procedure. Your payment history should show on time payments and no missed payments on any accounts that you might have because this is the most important information lenders look for.

30 percent goes to the amount you owe to the total amount of your credit limit. It would not be good if you are closer to maxing out all your credit as this leaves negative impression to lenders and this can lower your score.

The length of credit history takes 15 percent of the criteria. Accounts existing for a long time will help your score.

10 percent goes to new credit. New credit accounts opened in a short period of time can drag your credit score down.

The remaining 10 percent is for the types of credit you use. Lenders will consider the types of credit you use such as mix of credit cards, finance and mortgage loans and retail accounts.

Now that you know how the scoring works, your next step is to get your FICO score now and learn how to improve it. Get your FICO score using Fair Isaac’s myFICO service. You also get your credit report when you order for your FICO score by myFICO service, plus tips on improving your score. Improve your credit health by understanding your credit score.

Each person tries to make his credit history as favourable as possible. However, there are certain circumstances that simply make it impossible for some.

At a certain point, whether it is intentionally or unintentionally caused, some people may incur a bad credit. In such cases, everything else gets negatively affected, including credit card approval.

Credit cards are known to be very useful and convenient. Nevertheless, approval may not be that straightforward. There are definitely a lot of requirements that must be fulfilled and submitted. Of course, one’s capacity to pay his bills is going to be an utmost consideration.

Thus, not only is the income reviewed and compared against the supposed credit limit but the credit history as well. Of course, a negative credit history will most of the time be an enough reason for credit card application disapproval.

This further makes it difficult for one to redeem his credit standing. This may be unfair for some especially if such bad credit history has not been intentionally incurred. Likewise, in most instances, not only are credit cards disapproved in cases of bad credit but loans as well. This gives the person lesser options in making his finances run smoothly in some way.

Good thing there still remains to be several credit cards that guarantee approval in spite of bad credit. There are quite a number of options to choose from. Majority of these may be browsed online. Applications may also be accomplished online which are guaranteed to be secure and confidential. Not only this, online applications makes it easier and a lot faster for one to identify if his application has been approved or not.

Among guaranteed approval credit cards for bad credit, First Premier Bank Gold Mastercard appears to be the top choice. This is mainly because the offer remains to be a gold card not just a classic card in spite of bad credit.

Thus, a higher credit limit is still going to be available and there will definitely going to be more perks. Of course, the classic version remains available for those who prefer it. Online applications promise to give decisions in about 60 seconds as well.

Moreover, if one intends to wipe out his bad credit history and start rebuilding a good one, it may be easier as payment terms are said to be easy for this particular option. 4 major credit bureaus are also being reported to monthly which is advantageous if one really is doing a great effort in redeeming himself. Furthermore, access is available 24 hours and may be done over the phone.

First Premier Bank has indeed been known to be one of the generous providers of guaranteed approval credit cards for those with bad credit. Included in their list of available credits cards are the Centennial Visa and Mastercard and Centennial Gold Mastercard.

Whatever the type may be, approval is guaranteed and is promised to be convenient and fast. On the other hand, credit cards from Orchard Bank are great options as well. Terms and conditions are normally consistent among credit card providers.

These types of credit cards are indeed great options for those with bad credit. However, their use must not be abused in any way. They must keep in mind that such is already a great opportunity to make their credit histories good again. Thus, they must avoid incurring expenses that are going to be impossible to settle once again.

It is possible to have negative items deleted form your credit report. The first step in the process is to first of all get a copy of your credit reports. It is advised when doing any credit repair project to get a copy of your credit reports form all three credit reporting agencies. These are:
Experian Equifax Transunion

These can be accessed with ease from annulcreditreport.com and are free once every twelve month period. Otherwise they are available from the agencies themselves or through myFICO. You will need these reports to access the negative information that is going to be bringing your overall credit scores down.

Once you know what is having a negative impact on your credit reports you can then take the action step of the process to get the negative items removed from the report altogether.

The simplest way to do this is to write what is called a dispute letter. A dispute letter is simply telling the credit reporting agency that you do not agree with the information they are reporting within your credit report.

Once this letter is received by the credit bureau they have 30 days in which to verify the information with the company that put the information on to your report. If the information cannot be verified then the negative item will be deleted from your report.

Case studies have reported that you can expect to see a 2 point increase to your credit score for each deletion of a negative item. This may not seem like much but should someone have 10 – 20 of these negative items being shown in their report, this could easily add up to a 20 – 40 point increase on their credit scores. It is a process of taking bite size chunks of the report and dealing with them individually. It where all the small steps of the dispute letters combine in multiple deletions getting results that add up.

This does not mean that whenever you dispute an item on your credit report that it will result in the entry being deleted as some of the information may well be accurate. If it is accurate then don’t try and launch a dispute on the hope that it might get deleted. The only information you should be disputing is the entries of which you do not agree with. So if you have made a late payment and you are aware of this, then the best approach would be to contact the company that put that report there and ask that they remove the entry as it was a one time error in your part and it is not giving an accurate representation of yourself. Some companies may go ahead and honor that request, others might not. It is worth a try though rather than disputing it with the credit reporting agency who is going to be able to verify the information to be accurate anyway.

A dispute letter doesn’t have to be anything fancy. A simple letter could be along the lines of “I don’t think this entry belongs to me, please verify the information and amend accordingly, thanks in advance.” The only purpose is to point the bureau to the information you want them to look into. Always provide your contact details and date the letters, keeping copies of each for your own records and send these through registered mail.

You’ve been staring at those negative Midland Management, Asset Acceptance, LVNV Funding, and other collection accounts for years on your credit reports, but how do you remove them?

The first tip is to be sure that you’re pulling the correct credit reports that show your most up to date information without hiding anything. Second rate credit reports will only show you the first 6 – 12 months of information and will not show you everything — this means that when you have negative information deleted, you find more negative information popping up that you didn’t know anything about!

An excellent place to pull your credit reports and credit scores from is directly from the source – myfico.com themselves. There, you will see all 3 of your FICO scores, as well as all three credit reports.

Why is this important? Because FICO is a third party company that compiles the most accurate credit score and credit report information directly from the three major credit bureaus themselves: Experian, Equifax and Trans Union.

Once you’ve seen your actual credit reports and credit scores, it is time to dispute your negative information from the source. Follow these easy tips when you make your dispute:

1. Dispute your negative information by writing dispute letters to the credit bureaus – not to the collection agencies themselves. This might be surprising to you, but the credit bureaus actually have a better chance of verifying information with credit bureaus than you will, because the credit bureaus do not owe those collection agencies money! So make your dispute with the credit bureau based on whether the rules in the Fair Credit Reporting Act were followed, and you will find your negative items falling away.

2. Dispute all of your negative information as if it doesn’t belong to you. If the credit bureaus find that the collection agencies haven’t followed all of the rules or if your information has errors in it, your negative accounts will be deleted automatically.

3. Make payment arrangements or settlements for accounts that come back verified as yours. If you can afford to pay accounts with small balances, it is better to do that than to go through the trouble of spending months working on information that isn’t that important. Most collection agencies will settle accounts at 50 – 75% of what you owe, which is great news! And they will even provide you with a letter that proves that the account was paid by the consumer (you) and the credit bureaus will remove it.

Be sure to only dispute information that actually shows on that credit report. If Trans Union isn’t showing Midland Management on your credit report with them, don’t dispute it with them. It may end up popping up anyway, and you don’t want to cause yourself that additional stress.

You’re ready to buy a new car.

You’ve done all your homework.

You know your three FICO credit scores.

You determine that your highest FICO credit score is from Equifax (also known as your BEACON score).

So, you find a car dealer who uses your highest score (which increases your opportunity to get approved at a good rate).

You get to the dealership and ignore all the salespeople by going directly to the finance director’s office.

But as the finance director reviews your credit file in front of you…you can’t help but think something is wrong.

Sure enough…the dealer says your Equifax/BEACON score isn’t high enough for their lowest interest rate.

How can this be? You just checked your FICO credit scores through http://www.myfico.com/12 a few hours ago. It’s possible–although unlikely–the information on your credit report has changed and that your scores have decreased since you last checked them. Remember, your credit scores are dynamic and will change whenever information on your credit reports changes.

Your credit reports can change several times each month as new information is added or updated by your lenders. But more than likely, your scores wouldn’t change in this situation (especially if there were only a few hours between when you checked your scores and when the dealership reviewed your credit reports).

So, if your credit reports didn’t change, why is the finance director staring at your scores with such a discouraging face?

Car Dealers Can Use “Different” FICO Scores Than The Ones You See

The car dealer is probably using what is known as the FICO Auto Industry Option score instead of a traditional FICO credit score. You see, car dealers not only get to select the credit reporting agency they receive FICO credit scores from…they also get to decide if they will use a traditional FICO credit score or a variation of a FICO score called an Auto Industry Option score.

What’s the difference between these two types of scores?

Not a whole lot to most people…but there’s enough variation to make the majority of auto lenders use the Auto Industry Option score. The real difference between the two scores is that the Auto Industry Option score pays a lot more attention to how you handled previous auto credit.

- Have you made late payments on a current or previous auto loan or lease?
- Have you ever settled an auto loan or lease for less than you owed?
- Have you had a car repossessed?
- Have you had an auto account sent to collections?
- Did you include your car loan or lease in your bankruptcy?

Those actions will affect your Auto Industry Option score more than they’ll affect your traditional FICO score. Bottom line, if you handled your previous auto credit perfectly, you should have a high FICO Auto Industry Option score–that’s a good thing.

But what if you’ve had a few bumps in the auto credit road in the past? You guessed it…your Auto Industry Option score will be lower. You’ll be perceived as a greater credit risk and the auto lender may either deny you or use your lower score to justify charging you a higher interest rate.

You see, auto lenders are different than other types of lenders. And I’m not talking about their slimy ways, leisure suits, short ties, manly hairy chests, or gold bling.

A lot of other lenders look at your whole credit picture to determine whether or not to give you a loan. But many auto lenders care about only one thing…how you handled your past AUTO credit. That’s what a FICO Auto Industry Option Score gives car dealers–a way to pinpoint how you’ve handled what matters to them the most.

So, even if everything else on your credit reports went down the toilet after your bankruptcy, if you didn’t include your auto loan in your bankruptcy and never defaulted or missed a car payment, your Auto Industry scores will probably be better than your traditional FICO scores!

What a Former Auto Finance Director Revealed to Me

I recently spoke with a former finance director, and this is what she told me…

“So many people I have helped couldn’t believe their scores were so high with the FICO Auto Industry Option score. They had included all their credit card debt and their mortgage in their bankruptcy, but they reaffirmed their auto loan. What’s good about the auto score is that it truly helps the auto lender concentrate on what is important–how the customer handles his/her auto loans.

By our dealership having the auto enhanced FICO, it helped 30% or more of our customers get better rates.”

I don’t believe I’m going to say this, but I think I may actually have found something good to say about car dealers! Well, some of them, anyway…

As you can see, the FICO auto scores can work in your favor, if they are used correctly.

OK, I just wouldn’t be able to live with myself if I only said good things about car dealers.

So, in the interest of fair and balanced reporting, here’s how to protect yourself against slimy car dealers that can use your FICO Auto Industry Option
scores against you…

A Dirty Trick Car Dealers Can Play with Your FICO Scores

Let’s imagine your Equifax/Beacon FICO score is 585. Not too good. With a score that low, if you do get approved for a car loan, you’ll probably wind up with a high interest rate and high monthly payment.

So you go to a dealership and talk with the finance director and tell him your Equifax FICO score is 585. The finance director then reviews your FICO Auto Industry Option score. And, unknown to you, this score is actually higher than the Equifax/Beacon FICO score you pulled.

With this higher score, you’ll get approved at a better rate…right?

Not necessarily!

Here’s what unscrupulous car dealers can do. They won’t tell you that your auto score is higher than your traditional score!

They figure they have a sucker sitting in front of them. So they’ll try to get you financed at a higher rate based on the lower FICO score (thus making more profit for themselves).

How Some Car Dealers “Play the Spread” to Get You to Pay More

Now check this out…

It’s possible that a car dealer has the ability to pull your traditional FICO scores AND your FICO auto scores. That means they’ll have six scores on you. It’s a guarantee that some of those scores are going to be higher than the others. So which ones will they use when trying to get you financed?

It depends.

Are you familiar with the term “spread”? It’s how car dealers make money when they finance you. If they can quote you a higher interest rate than you deserve–then they stand to make a nice chunk of change from the bank that finances you.

The only way to make a killer “spread” is to make you think that you have lower scores.

So, what can you do?

Don’t despair…I can help you.

How to Use Your FICO Scores to Your Advantage when Buying a Car

Fortunately, you don’t have to fall for their dirty tricks. Now that you know all about FICO Auto Industry Option scores, you can protect yourself. Here’s what I suggest…

1. When you first walk into the finance director’s office, don’t tell him what your FICO scores are. Wait until he reviews the scores himself. Then ask him what your scores are.

2. If the scores he reviewed are higher than the ones you have, don’t say anything and just go by his scores.

3. However, if your scores are higher, then pull them out and show him. If he has a choice in the type of scores he can use, there’s a possibility that he’ll be able to use your highest score. And, it will let him know that he doesn’t have a fool sitting in front of him. He can’t take advantage of you!

How do you find out what your FICO Auto Industry Option scores are before you walk into a car dealership?

You can’t.

Sorry. They’re not for sale–at any price. Only lenders have access to them.

FICO would like to sell them…but there just isn’t enough demand. I mean seriously, up until you read this article, had you ever heard of the FICO Auto Industry Option score?

Exactly.

Remember, we were just given access to purchase all three of our traditional FICO credit scores on June 11, 2003 at 8:00 a.m. (I actually got misty that day…what a geek I am.)

Only a very small percentage of the population even knows they have three FICO credit scores…let alone three Auto Industry Option scores.

So How Can You Use This Information to Help You Get Your Next New Car Financed at the Best Interest Rate

1. First, get your three credit reports. If you handled your previous auto credit well–your FICO Auto Industry Option scores will be higher than your traditional FICO scores. So expect more from the lender.

2. You can also ask the lender to show you their tier levels. Tiers are basically charts lenders use that have different interest rates based on your scores. You want to see which tier your fall in. To see an example of an auto lender’s tier schedule, click here.

3. If they won’t show you…at least have them break it down verbally for you. (Personally, I like to see it with my own eyes, as I never believe a word that comes out of most car dealers’ mouths.)

4. If you’ve handled your auto credit poorly…then you should simply try to find an auto lender that uses just the traditional FICO credit scores. When you find a lender that uses a traditional FICO credit score, you’ll have your best chance to get the lowest interest rate.

5. Start by calling dealerships and asking the finance director if they use a traditional FICO credit score to make their lending decision or if they use the FICO Auto Industry Option score.

These steps will get you headed in the right direction. This won’t be easy, as a lot of car dealers use the FICO Auto Industry Option score.

There are different ways to open a new credit file each of which works to help one build a new credit file and utilize simultaneously while repairing ones credit or establishing credit. One can use their own name with different personal information. You can also use the same personal information with different first or last name, or use an alias with different personal information. Before you decide which way to go you must know exactly what you are trying to do.Personal information data include birthdate, social security number and address. Variations can be made easily to the address, but other variations including social security number and birthdate require you to be very keen to the inner workings of credit and how credit bureaus work.

Most people don’t realize that credit bureaus are private firms that issue rankings on your credit when a credit check is done. People with bad credit are not doomed and there are ways out of the bind.

Understand that a credit bureau is a massive data base and new names are entered every second. If you call the credit bureau and give them your information they are able to pull your credit report and FICO score. All three credit bureaus work in the same way. Any variation in the way your details are presented lodges the details as a new credit file because there is no history of the person. Therefore you have essentially created a new credit file therefore a new identity. Learn more on how to establish a new credit file at [http://www.1800aaacredit.com].

Your credit score is a numerical gauge of your ability to payback loans. Anytime you want to borrow money or get credit, the lender will look up this score to determine the risk involved in lending to you. The higher the score the better, so if you get a credit report and see a high score that means your credit is good, right?

Not necessarily so. The fact is there are several different credit scoring methods. Credit scores calculated from the same credit reports can differ substantially from credit scoring method to credit scoring method. So how can you ever know what your credit score really is? Well, luckily, 75% percent of lenders use FICO scores exclusively and you can purchase FICO scores yourself–you just have to know where to go.

FICO credit scoring was developed by Fair Isaac and Company as a numerical method of determining your credit worthiness. The scores range between 300 and 850 and are basically based on your past bill paying performance.

It would be easy if everyone used this scoring system, but the three major credit bureaus each have their own version of the FICO score: Equifax uses the Beacon system, TransUnion uses the Empirica system, and Experian uses the Experian/Fair Isaac system.

Althought they all use slightly different systems, all systems are based on the original FICO scoring method so generally your score should be equivalent from each. Of course, some lenders may also use their own scoring methods as well.

There is only one place where you can get your FICO score from all three bureaus and that is at http://www.myfico.com. If you order your credit score from anywhere else, again be aware that these scores are “FAKOs” (or “fake”) and can differ considerably from your FICO credit scores.

Adding to the confusion is the credit bureaus themselves. Recently, Experian revealed that the national average credit score of its consumers is 678. This is very misleading to the average consumer. When you buy your credit report and score directly from Experians website, you are getting what they call the “PLUS Score,” which is NOT a FICO score, and is NOT used by lenders anywhere. (Equifax is the exception–you can buy your FICO score directly from them at their website; however, the only place to get all three scores together is at http://www.myfico.com.) The 678 PLUS Score reported by Experian is actually the average of consumers’ PLUS Scores, not their FICO Scores.

Clearly, the PLUS Score (and all Non-FICO scores) are useless. Not only that, but such hype misleads consumers into purchasing their PLUS Score thinking that they are getting the same credit score that their lender will use. Non-FICO scores are worthless not matter what the credit bureaus or any website selling non-FICO scores claim. Even a few points difference in your credit score can mean confronting the reality of the loss of thousands of dollars out of your pocket–a loss that you probably didn’t plan for. The next time you want the most accurate credit score available, do yourself a favor and get the industry standard: the FICO credit score.

A prepaid credit card is a good way for the student to stick to a budget. Parents feel that instead of giving their student a credit card that lets them charge too much that a prepaid card is much better. The prepaid credit card works very simply for the student but it can become a problem if you are not careful of the type that you receive. When you apply for a prepaid credit card you should check out the types that are available. This is the best method to use for a student to gain a good credit score.

You find that some prepaid cards charge a high interest rate along with an annual fee. When you secure this type of card then the most of your money goes toward all these fees. You normally make a deposit into the bank and that lets you make charges but you are still responsible to make monthly payments. The system works in this respect when you are late you pay late fees and in some cases you are charged interest on the loan. Even though you have placed the money in a savings account to be held for your charge card it is still considered a loan. The money is the lenders security that the loan will be repaid even though your account is holding enough money to cover the debt you are still responsible to make your payments in a timely manner. You will build a good credit score by using the prepaid credit card.

There really is an enormous flood of information out there on the Net concerning how to raise your credit score. The good thing is that there’s only a tiny number of absolutely crucial points that you really must be familiar with. In this piece I’ll briefly go through some of the crucial points that you ought to keep an eye on.

Keeping paid up but dormant accounts you may possess is a tremendously major detail to make an effort to follow up on. Most people are inclined to close this form of additional credit account. Not closing them down is a far better tactic. This will help you to establish a clean record and lift your rating in the process.

Examining your existing credit report for mistakes is a very major thing to make an effort to look at. Getting hold of your credit report is obviously the first step here. The next thing to do is to write and object to any mistakes you have noticed. The adjustment of any inaccurate information can certainly help your credit score.

Calling a halt to new requests for loans or credit cards is a particularly major detail to try to consider. These kinds of new requests will produce quite a large amount of needless activity on your credit report. This will really spoil your credit rating and score. This is why refraining from making any new applications for loans or credit cards right away is so critical.

As I said in the introduction to this piece, this is a quick synopsis of some of the most vital details with regards to the question of how to raise your credit score. There are just a tiny number of other really vital points that you really must have an understanding of.