If you’ve had difficulties with applying for a traditional credit card, then perhaps consider applying for a prepaid credit card as a way to begin building your credit.

Prepaid credit cards are still backed by the major credit card companies, which means you’ll have the security of a traditional card. You don’t have to worry about credit checks or employment checks because you’re not borrowing any money. The credit card company knows you can only spend money that has already been prepaid, there are no issues with affordability or previous repayment history.

Using a prepaid credit card means you have an interest free way to access the benefits of using a credit card to pay your bills and make your purchases but you won’t be increasing your debt levels. You could also benefit from knowing your payments may also be reported to the credit bureaus, which you could be increasing your credit score slowly as well.

Be sure to do your research before you apply for your card because you will want one that will report your payments to a credit bureau so you could benefit from better credit. Not all companies offering prepaid cards choose to report your speding activity, so be sure to choose one that does.

Operating your prepaid credit card is not really much different to a traditional credit card. The primary difference of course is that you’re not increasing your debt levels by spending the bank’s money. You use your own money to prepay the account and then pay your bills using your card.

You will receive statements to show your account usage at the end of each month, so you have the option of showing your statements and reporting any bill payments or loan repayments to a credit reporting bureau so you can begin to improve your score without being charged any interest fees spending on your credit card.

The biggest benefit for anyone with bad credit is that you’re not increasing your debt and you won’t be charged interest on the things you purchase. Remember, the money on your prepaid card is your own money.

Your prepaid credit card is just an account with a visa or mastercard capacity that only uses funds that you deposit into it before you go shopping.

One of the greatest advantages of this type of card is that you’re forced to learn to be more responsible with your spending habits. Because you can’t purchase things unless you’ve managed to deposit money into your account first, it also teaches you to control your finances better as well.

Learning responsible budgeting practices is a great way to avoid getting stuck in the bad credit cycle again in future. Because you’re learning to watch how much you spend and be careful about how much money you put aside for shopping trips, you’re learning to allocate money for priorities instead of buying things you don’t really need on impulse. This begins to build positive spending habits rather than putting you further into debt.

Credit repair companies advertise regularly that they can help repair your credit. They are happy to take your money before proceeding to write you a simple letter to that you could easily write on your own.

The usual advertising spiel from these credit repair companies is that only they know how to begin an investigation into the bad listings on your credit report.

What these companies are looking for are any listings from creditors who might have reported wrong information or they might have mixed up your report with someone else’s with a similar name. They might even be looking for a listing from a creditor who forgot to report an already repaid debt.

Why would you pay high fees to a credit repair company when you can write a credit repair letter on your own and achieve the same result?

The issues listed above are all easy to investigate and easy to verify that they’re incorrect. By writing a simple letter to the Credit Reporting Bureaus on your own you can dispute these listings and have them removed. Once they’re removed, you’ll see your credit score improve.

Before you begin you should order an accurate copy of your credit report. This is so you’ll know exactly what is listed and who listed it. Make a mark beside anything listed on your report that doesn’t belong to you or should show as repaid.

If you see any enquiries noted on your report that are actual debts you did apply for and did take out, then these can’t be removed even if they have negative listings for them.

Remember - You can’t remove accurate information legally.

Just because you can’t remove genuine negative listings doesn’t mean you can’t ask the credit reporting bureaus to conduct an investigation into every item listed though.

There is no fee for writing and submitting a credit repair letter. This means you can write a letter and request an investigation into every listing - even the real ones.

The credit reporting bureaus are then forced to resond to your enquiry within 30 days. If they find a listing that they can’t verify then they should remove it for you, which is great news for your credit score.

Here are some tips on writing your credit repair letter:

1. Before you write your credit repair letter, do a quick search on the internet and look for a ready-made template. Be sure to change the wording on the template to include your own information and your own listing details.

2. When you’re done writing, make three copies and send each of the three major credit reporting bureaus a copy. You’ll find the contact information listed clearly on each of their websites.

3. Send your credit repair letters out to the credit reporting bureaus by registered mail or by certified mail. Always keep a record of the date you posted your letters.

4. Keep all copies of correspondence for future reference.

5. Be patient. It takes time to conduct investigations into your credit report. They will respond, but it does take time.

Writing a credit repair letter might seem like a lot of work for very little reward, but if you can succeed in removing even one negative listing from your credit report then you’ve achieved your goal.

If you plan to apply for any credit it’s important to be sure your credit is as high as you can possibly get it. By increasing your score or repairing your credit report you could also be increasing your chances of your credit application being approved.

As well as improving your chance of approval, you might also be increasing your chance of being offered much lower interest rates and charges.

Many lenders reserve the ‘better’ interest rates for customers with good credit scores and positive repayment histories. By repairing your credit enough you may actually be able to raise your score into the lower risk categories so you can receive these more competitive rates too.

Anyone can take simple steps to improve credit score. Easy options like making sure you catch up any overdue repayments, pay any outstanding bills and keep up to date with your bills can definitely help to improve your score.

Unfortunately, while they will help increase your score slowly, they won’t remove any negative listings that remain on your credit report from past issues you may have, so your simple steps may be in vain.

Another bad side to trying to repair credit on your own is that by doing the wrong things you run the risk of doing even more damage to your credit score.

When your credit score is calculated, the three Credit Reporting Bureaus take a look at the reports they receive from all your creditors. Your creditors submit reports about your financial activity, whether good or bad.

The Bureaus check out what your past repayment history has been like. They consider how much credit you have and if you’ve been responsible with the money you’ve already borrowed from lending companies.

With all this information, they can calculate your credit score that other credit companies use to assess whether you’re likely to be a good customer or not.

So if one of your creditors has made a negative report about your payments, then the simple act of catching up a few late payments on other bills won’t remove this negative report, nor will it help you to increase your chances of being approved for any new credit you want.

There are some places around on the internet that can show you how to remove negative listings from your credit report on your own. The process is quite simple. You write to the Credit Reporting Bureaus and you request that they investigate the listings on your credit report.

They have 30 days to investigate your claim and if they can’t verify the listing they see there, then they’ll have to remove it.

Once again, if you do it wrong then you also risk doing even more damage to your credit. It’s also important to remember that any listings that truly are negative can’t be removed, no matter what credit repair companies claim.

This is where a reputable, professional credit repair service can help you. They have the experience and the knowledge to negotiate with your creditors to help remove any negative listings you have on your report. The professionals are also trained to know what type of listings might be removed and which ones can’t.

You might also find that if you call your creditors to question a listing you find, they won’t be willing to negotiate with you directly. A credit repair company has many different levels of access to your creditors, which means they may be able to negotiate where you couldn’t.

Of course a credit repair company will charge you fees, but you should remember that those fees could be well worth it if you suddenly find your credit score has been boosted back into the normal ranges and out of the sub-prime ranges.

Always research any credit repair company thoroughly before agreeing to anything. Ask questions and read the fine print. When you’re sure this is the option you want to tak, call your chosen credit repair company and get your bad credit repaired today.