Re-establishing Your Credit Rating

Secured Card, Prepaid Card, or Visa Debt?

If you are looking to re-establish your credit rating, a secured card can help you do so. A secured card is a credit card that is secured by funds you deposit with the financial institution offering the card. The money is held as collateral in case you systematically miss your payments. However, missing a payment and using collateral funds will not improve your credit rating. What will improve your credit rating is making your monthly payments / paying off your credit card each month. If you elect to pay your minimum monthly payment, you will be paying interest on the card. After a certain amount of time and good repayment history, depending on the agreement with the creditor, the funds you have deposited will be returned to you and the secured card will then become an unsecured credit card.

A pre-paid card is a pre-funded card. You typically can get it without a credit check or a bank account. You can only spend the money you have loaded onto it. As this is basically cash in plastic form, your use of this card is not tracked, nor reported to the credit bureaus. Therefore, use of the pre-paid card will not improve your credit rating. If you wish to use a pre-paid card, check into the various fees pertaining to re-loading the card with more funds, transactions and processing.

If you are interested in a card that has more flexibility than a debit card, do not want a pre-paid card, and do not want, or have not saved enough, for a secured-card, you can contact your bank and discuss the possibilities of a Visa Debit card. The Visa Debit card debits your bank account, but unlike a debit card, it can be used online, over the phone, and to make reservations. For more information, visit However, as this card debits your bank account, it will not help you reestablish your credit rating.

Continuing to pay secured car loans and mortgages during your bankruptcy or consumer proposal will also let you re-establish your credit rating.