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Credit Advice
Topics addressed on October 27, 2010:
Pre-paid cards will not help credit scores
Dear Experian,
Is there a pre-paid credit card company that I can use to help improve my credit score?
- MBM
Dear MBM,
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.
Thanks for asking.
- The "Ask Experian" team