How CashPlus prepaid can help to improve a credit rating

I've got a bad credit history and I'm having trouble finding a credit card to repair my score for the future. I've heard a Cashplus prepaid card could be helpful and I'd be accepted. Is that true?

Applicants for the CashPlus prepaid card will not be subject to a credit check so an application is highly likely to be accepted.

And, the Cashplus prepaid card could help towards repairing a poor credit history.

The card offers a Credit Builder scheme: cardholders pay a monthly fee to hold the card and, once they've made payments for a year, it's recorded as a completed loan on their credit record, adding positive repayment marks which could be seen by future lenders.

The CashPlus prepaid card

CashPlus don't heavily advertise the cost of the different account options until members have signed up.

One option with Creditbuilder however costs £4.95 a month, and has an initial fee of up to £9.95.

Although there's no credit check for the card applicants for Credit Builder need to provide ID (passport or driver's license), proof of UK residence and proof that they're over 18.

Applicants don't need to have a bank account though.

With this in place, cardholders commit to making the monthly payment for 12 months and, once it's paid in full, the monthly payment will be shown as a correctly repaid loan on their credit report, which could then be seen as evidence of improvement.

The card then works like any other prepaid card, allowing customers to load cash on to the card at any Post Office or by BACs transfer.

However, note that a prepaid or credit card isn't the only way to improve a damaged credit rating. In fact, used incorrectly, they can be problematic.

Improving credit

Getting on the electoral roll, checking passed accounts have not been left active as well as making sure there are no faults in the information the banks have are all simple ways to potentially improve credit scores.

Proving stability in other ways can also help.

Having a landline instead of a mobile and owning a house instead of renting could both improve the chances of having applications accepted.

Checking credit files for any anomalies that may have caused a problem with your previous application. Statutory reports are available for £2 and free trials can also allow a full check, incorrect information can be rectified by the bank or the credit reference agency.

On the other hand, any kind of contract should be entered into with caution.

Taking out a prepaid card and failing to make the set payments, or monthly repayments if you're using a credit card to improve a poor score, is worse than not taking one out in the first place.

A note on set credit scores

Finally, when making future applications note that each bank is different and application criteria change frequently: there's no 'set' credit score.

That's because lenders assess applications based on risk rather than in terms of an intransigent set of criteria.

Although boosting attractiveness to future lenders is always a good idea, the 'perfect' credit rating is a myth, there are no guarantees.

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