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Topics addressed on October 27, 2010:
Pre-paid cards will not help credit scores
Is there a pre-paid credit card company that I can use to help improve my credit score?
At this time, pre-paid cards are not reported to the national credit reporting companies, so are not part of your credit report. Until they become a part of your credit report, they cannot be used in credit score calculations.
Pre-paid cards fall into a category known as alternative credit data. The cards are similar to traditional credit cards, but they are not exactly the same. Because you “load” the card with a cash deposit, they are more like using a debit card than a true credit card. That difference makes it unclear as to whether using a pre-paid card is a good indicator of credit risk.
The use of pre-paid cards as an accurate indicator of credit risk is being studied. However, until it is clear that using a pre-paid card helps predict that you will use traditional credit wisely, they will not be part of your credit report and so cannot be included in credit score calculations.
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- The "Ask Experian" team