James
My son, who has a bad credit history, thinks that a prepaid credit card with something called "credit builder" may help to begin to repair his credit record, is he right?
Mrs Duncan, Grampian
Mrs Duncan,
Yes, the prepay card you refer to can help your son rebuild his credit history. This is because new cardholders pay the card’s annual fee via a small loan that is repaid in instalments over a year and registered with Experian. So as long as these payments are made on time, this information will be helpful to his creditworthiness. When your son next applies for credit, the lender will review his entire credit report of course, so it’s equally important that he makes sure he’s on the electoral register, that he has fully repaid his past debts and that, if he missed previous payments for a good reason such as redundancy or illness, he explains this by adding a note to his credit report.
James