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Credit Card Applications » Questions » FAQs » Building Credit History » Can I build a credit history with a prepaid card?

Can I build a credit history with a prepaid card?

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Leo Zhu

No, you cannot.

Prepaid cards do not report to credit bureaus and have no effect on credit history or credit scores. That’s because they aren’t really credit cards and there is never anything to pay back. All the money is loaded onto the card initially, and then spent until it runs out. Using a prepaid card won’t tell potential creditors anything about your payment behavior and whether you are a good candidate for a loan.

If you want to build credit history, you will need a card that reports to the three major credit bureaus – Experian, TransUnion, and Equifax. They will track your payment history, total credit limit, number of lines of credit and types of credit to build a credit history that tells a story about your payment behavior.

Prepaid cards are very convenient, but one thing they are not good for is building credit history. If you would like to help your child build his or her credit, look into getting a student credit card. If you are trying to rebuild your own credit and are having trouble getting approved for an unsecured credit card, try a secured card that reports to all three credit bureaus.

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