Suits Me Simplified: Banking 101

Can You Build Your Credit Score Using a Prepaid Debit Card?

It’s not always easy keeping on top of your credit score with so many factors that can have an impact. Find out how a prepaid debit card can help your score stay on track!

Image of a calculator with the words help instead of numbers - surrounded by piggybanks. Financial difficulties concept.

Having a good credit score is a wonderful thing. It shows you are reliable and responsible, which will make it easier to apply for a mortgage or other loans when you need them. However, achieving a good credit score takes time, and if your score has been tarnished due to paying bills late or missing repayments on your previous loans, it can be an uphill battle to get your score back to a healthy position. So, if your credit score is not where it should be, it is possible to rebuild your finances and improve your credit score by starting with a prepaid debit card.

Follow these few simple steps, and you’ll be back on track with your finances and bring your credit score to a level that will make your life easier.

Avoid Credit Cards

There is no doubt that credit cards can be useful, but they are often the reason why so many people end up ruining their credit scores. Having a credit card can lead to increasing your debts, and there is always the temptation to buy those limited edition trainers or the newest smartphone because you’ve been lured in by a big, bright “SALE” sign. Quite simply, if you don’t have a credit card, the temptation of spending money you don’t have is not there.

Pay Your Bills On Time

Bills tend to come at the same time every month, so you know when to expect them. As hard as it may seem, try to ensure you have the funds to pay the bills when they are due, changing the days your bills leave your account to align with your payday is a great starting point.

Although, this may require a little bit of a financial juggling act at first, if you get into the habit of paying bills on time, you will improve your credit score. To ensure that your efforts are noticed, check to see which of the bills can be linked to the agency keeping tabs on your credit score. 

Prepaid Debit Cards and Direct Deposits

Having a prepaid debit card is not only convenient, but it is also a secure way to keep your funds with you without the risk of losing them or having them stolen.

If you are still paying off old debts, you can set up a direct debit from your prepaid debit card. This will ensure the repayments are always on time, which will go a long way in getting your finances back on track.

Convenience and Security

A prepaid debit card is ideal for those who, for whatever reason, can’t open a regular bank account. You can ask your employer to pay your wages into your prepaid debit card, pay bills, do your shopping and even make online purchases. It is essentially a credit card without the credit as funds need to be deposited into the card before you can do any spending. It’s also incredibly safe and secure as you avoid the need to carry cash that can be stolen. You can also track your spending online and keep printouts to show you’re financially responsible again.

No matter how bad your credit score is, you can make things right. Use a prepaid debit card to accept deposits and make payments where needed without the risk of debilitating credit.

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