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  • FIRST POST
    Former MSE Dan
    Need to rebuild a bad credit history? New ‘last resort’ option.
    • #1
    • 1st Apr 08, 7:08 PM
    Need to rebuild a bad credit history? New ‘last resort’ option. 1st Apr 08 at 7:08 PM
    1 April 2008


    What’s this all about?

    If you’ve got a poor credit history, or no history at all, it can be extremely difficult to get accepted for new credit, including loans, credit cards and mortgages. Yet there’s a new ‘last resort’ solution to help repair a dodgy past; it costs £60, but if you’ve tried all the other ways then it is worth doing.

    Before trying this last resort option

    The classic credit rehabilitation tactic is to get a credit card for bad credit, which has lower acceptance criteria, but charges a hideous interest rate e.g. Barclaycard Initial, Capital One Classic Visa*, or Vanquis. Then, spend a little on it each month, making sure you always repay in full, meaning there’s no interest cost.

    Once you’ve kept this up for a reasonable period, provided you haven't made a late payment or defaulted, the credit reference agencies have an improved picture of you as a customer, hopefully putting you in a better position to get some cheaper credit. See Your Credit Rating guide for more ways to improve your credit history.

    If you've been rejected for those cards

    Unfortunately, some people are rejected for cards like this too. And this is where the new solution comes in. For £5/month you can get a CashPlus Card* prepaid Mastercard.

    Unlike a credit card, here you can only spend if you've loaded money on the card in advance, so there's no credit facility. Yet importantly there's no credit check needed to get it.


    Sign up for its credit builder scheme

    And this is the bit no other card offers. Once you've been accepted for the card, opt for its Credit Builder option (you'll see details on the top left of the CashPlus page).

    This means that the standard £4.95 monthly fee, now counts as a monthly loan repaying £59.40 a year interest-free. And thus this is then reported back to credit reference agency Experian you are correctly paying it.

    It should show on your credit history as a fully repaid loan agreement, making you a more attractive customer (to those companies who use Experian for credit scoring, which is the vast majority of them) and hopefully meaning you can apply for better credit card and loan deals.

    The only negative, of course, is that where just applying for and paying off a credit card in full is free, this costs £60 a year.

    Will I definitely get it?

    There is no credit check required, so all you need to do is provide identification, prove that you are resident in the UK and that you’re over 18.

    What happens after a year?

    The interest-free loans are over a year, at which point Experian gets told you’ve fully repaid it. At that point, consider whether you want the card for another year (costing another £60), or whether to try to get a credit card and cancel the prepaid card.

    Don’t just leave the card open if you don’t need it any more, as it’s a waste of cash.

    Is the card any good as a prepaid?

    If we were doing a review purely on prepay cards (and we'll be publishing a full guide to the best in the next few weeks) it wouldn't do that well because it charges a monthly fee.

    Yet in this case, as you have to pay the fee anyway, once you've got the card, it's not such a bad deal. Therefore as if you have a bad credit history, you're unlikely to have any plastic, you could use this card as a way to buy things online (and thus access the cheaper prices there).

    If you want to top up the card, you can do so at Post Offices for free.

    A MAJOR WARNING.

    If you opt for this system NEVER EVER EVER miss one of the monthly payments. Ensure you're organised, as if you do the miss would be reported to the credit agency, leaving you in a worse position than when you started.


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    * Using these links helps the site stay ad-free and free to use, as they're 'affiliated links' which invisibly take you via commercial price comparision services like Moneysupermarket or Find, which then pay this site per click.

    You shouldn't notice any difference, the links don't impact the product at all and the editorial line (the things we write) is NEVR impacted by the revenue. If it isn't possible to get an affiliate link for the best product, it is still recommended and included. The following capitalone.co.uk, mycashplus.co.uk are identical unaffiliated links provided for the sake of transparency. Click on the following link for more details on how this site is financed.
    Last edited by MSE Helen S; 27-03-2013 at 2:20 PM.
Page 8
  • scorpioyorks
    Thank you Tixy I will take a look at that
    • Lightattheend
    • By Lightattheend 29th Jul 13, 11:21 PM
    • 1,151 Posts
    • 1,663 Thanks
    Lightattheend
    Been reading this thread with interest as contemplating getting one of these cards as a way of separating money off for specific purchases (such as Christmas pressies). Can anyone help and tell me, is the monthly fee taken from the card or can it be paid by direct debit?

    TIA
    BR 08/06/09 ED 10/03/10
    BSC member 250
  • scorpioyorks
    Hi, I have just signed up for one of these cashplus cards with the credit builder option. Regarding your question I had to pay 4.95 set up fee which was taken from my bank account. I then paid 4.95 for the first month which I transfered to the cashplus card via my bank account and am putting 4.95 on the card every month as they loan you 59.95 and you pay them back 4.95 a month. I am not interested in using the card as I just want it to improve my credit rating. I am going to ring them though as I haven't been sent the amount that they are supposed to be loaning me and have paid three lots of 4.95 already. When I last spoke to them they said it will start in August so I need to check. Hope that helps.
  • sarah1773
    Hi

    I have just finished a year with creditbuilder. They have offered to do it again for another year. I'm not sure whether there's much point? I was discharged from a debt relief order in May 2011. I have been trying to improve my credit file for when the DRO disappears by being a Next customer and paying in full every month and using creditbuilder. If i do a second year, will this be a separate item from the first one on my credit report, as the first one is now 'settled'? I suppose what I'm asking is, had I may as well wait a couple more years before using creditbuilder again so it's nearer to when my DRO drops off my credit file?

    Hope that makes sense!
    Thanks
  • Steven Elliott
    I completed credit builder with this card, after the 12 months i had the loan fully paid back and now i was accepted for a monthly mobile contract so that will go on my file also so now i just got the cash plus card but dont pay the £4.95 fee , they also give me a £250 overdraft on the card at 50p a day. Don`t use it very often only if something i really need quickly
    • Lightattheend
    • By Lightattheend 4th Oct 13, 11:22 PM
    • 1,151 Posts
    • 1,663 Thanks
    Lightattheend
    Just successfully applied for the card with the creditbuilder option
    BR 08/06/09 ED 10/03/10
    BSC member 250
    • not_very_money_savvy_guy
    • By not_very_money_savvy_guy 1st Dec 13, 5:13 PM
    • 6 Posts
    • 1 Thanks
    not_very_money_savvy_guy
    Hi, I was accepted for a Shout Card three months ago (I have 2 defaults until 2016) and have already seen a massive improvement in my credit rating. Question is if I get this with credit builder (adding a loan to my credit report along side the credit card) would this also greatly improve my rating even better over time or should I just leave it alone and just keep using the card I already have?

    Thanks, Tristan.
    • Richard Z
    • By Richard Z 13th Jan 14, 11:14 PM
    • 22 Posts
    • 3 Thanks
    Richard Z
    Hi, I'm a newcomer in the UK, I'm here since January 2013, I was on JSA but I started working in last November, I'm on a permanent full-time contract but still on probationary period, I'm registered on the electoral roll since August 2013. I have a basic bank account with HSBC, I've tried to upgrade to a full account in order to have a credit card, but was refused and I have £2000+ savings. I've checked my experian and I have 873 points fair score, it states that "You have no successfully settled credit account". I was advised by a friend to get a CR card and build credit history, the problem is that even vanquis or aqua will not let me proceed with my application as they require 3 years UK address history, which I do not have. So, should I go for the prepaid cashplus card? It seems that I do not have other option...

    Cheers
    • greeneyedlad
    • By greeneyedlad 7th Mar 14, 3:08 PM
    • 79 Posts
    • 4 Thanks
    greeneyedlad
    hello
    i entered into a scottish protected trust deed on march 2009.
    i would like to try & re-build my credit score.
    iv checked my report & everything is now correct on it.
    i do not work as i am on esa disability benefits.
    i used the mse pre-apply eligibility checker tool.
    it said i had a 20% chance of getting an aqua classic or aqua advanced card.
    is there any point in me applying now to try & get this card?
    i believe my trust deed is recorded on my credit file for 6 years from the date it started, so should i wait till the 6 years is up which will be next march 2015 before applying?
    Or does this not even matter as i am not in employment, i put down i was a homemaker rather than unemployed. there is no disabled option?
    Or should i just get a pre-paid card instead now?
    Or again should i wait till the 6 years is up to even get a pre-paid card?
    is the cash plus credit builder card the best 1?
    many thanks for your advice in advance
    martin
    • messi2504
    • By messi2504 13th Mar 14, 12:00 AM
    • 72 Posts
    • 14 Thanks
    messi2504
    I've applied for one of these cards, will top it up for £60 and then it can take care of itself for the year.
    • wrkactjob
    • By wrkactjob 14th Mar 14, 9:17 PM
    • 247 Posts
    • 49 Thanks
    wrkactjob
    Whats best to do at the end of the year? close it or carry on?
  • Axeros
    Will a pay as you go Prepaid credit card be just as effective but cost less?
    If the goal is to build one's credit rating, wouldn't it be much cheaper and just as effective to get a pay as you go prepaid credit card?

    For instance, here are my calculations for a whole year, spending £10/mnth on the credit card, and topping up by bank transfer (free).

    e.g.

    ClearCash Prepaid Mastercard - Pay as you go

    - Card issue fee = £4.95
    - Spend £10/mnth on card= £120
    - Monthly Fees: None
    - Transaction Fees: £0.25x12=£3

    Cost of card= £7.95 ( £4.95 + £3)

    I will have received £120 worth of goods/services, using a card that cost me an additional £7.95.
    Total cost £127.95


    Cashplus Card with CreditBuilder

    - Card issue fee = £4.95
    - Spend £10/mnth on card= £120
    - Monthly Fees: £4.95 * 12 = £59.40
    - No transaction fees

    Cost of card= £64.35 ( £4.95 + £59.40 )


    I will have received £120 worth of goods/services using a card that cost me an additional £64.35.
    Total cost £184.35

    Won't my credit rating show the successfully repaid monthly bills in both cases?

    I've read that repaying your credit cards bills is reported on one's credit report. Or does it not apply to prepaid credit cards?
    • thebritishbloke
    • By thebritishbloke 10th Dec 14, 12:07 PM
    • 1,459 Posts
    • 585 Thanks
    thebritishbloke
    If the goal is to build one's credit rating, wouldn't it be much cheaper and just as effective to get a pay as you go prepaid credit card?

    For instance, here are my calculations for a whole year, spending £10/mnth on the credit card, and topping up by bank transfer (free).

    e.g.

    ClearCash Prepaid Mastercard - Pay as you go

    - Card issue fee = £4.95
    - Spend £10/mnth on card= £120
    - Monthly Fees: None
    - Transaction Fees: £0.25x12=£3

    Cost of card= £7.95 ( £4.95 + £3)

    I will have received £120 worth of goods/services, using a card that cost me an additional £7.95.
    Total cost £127.95


    Cashplus Card with CreditBuilder

    - Card issue fee = £4.95
    - Spend £10/mnth on card= £120
    - Monthly Fees: £4.95 * 12 = £59.40
    - No transaction fees

    Cost of card= £64.35 ( £4.95 + £59.40 )


    I will have received £120 worth of goods/services using a card that cost me an additional £64.35.
    Total cost £184.35

    Won't my credit rating show the successfully repaid monthly bills in both cases?

    I've read that repaying your credit cards bills is reported on one's credit report. Or does it not apply to prepaid credit cards?
    Originally posted by Axeros
    ClearCash isn't a credit facility, it's a prepaid debit card. It won't be reported on your credit file.
    Credit 'Score' - Don't buy the credit 'score' that Experian, Equifax and Noddle want to sell you. It's an arbitrary number that means nothing when it comes to applying for credit.

    ALWAYS HAVE A DIRECT DEBIT SET UP FOR THE MINIMUM PAYMENT ON YOUR CREDIT CARDS, REGARDLESS OF WHETHER YOU PLAN TO LOGIN AND PAY EACH MONTH.
  • Axeros
    Prepaid Mastercard = prepaid debit card
    ClearCash isn't a credit facility, it's a prepaid debit card. It won't be reported on your credit file.
    Originally posted by thebritishbloke
    OK, thanks, that's cleared it up for me.

    I'd just assumed, since they're often referred to as prepaid credit cards, that "prepaid Mastercard" = "Prepaid credit card".

    But, of course, I see your proint. A prepaid Mastercard is just a prepaid debit card which you can use to pay where Mastercard is accepted (with exceptions).
    Last edited by Axeros; 10-12-2014 at 1:25 PM. Reason: Typo
    • Barpeeler
    • By Barpeeler 11th Dec 14, 10:36 PM
    • 60 Posts
    • 13 Thanks
    Barpeeler
    I've applied for one of these cards, will top it up for £60 and then it can take care of itself for the year.
    Originally posted by messi2504
    Did this work? Sounds like the easiest option
    • UsetheFORCE
    • By UsetheFORCE 11th Dec 14, 11:00 PM
    • 662 Posts
    • 212 Thanks
    UsetheFORCE
    It should be noted that if you have creditbuilder on cashplus (it will show as a LOAN on your credit file)

    After a few months, you may be offered a iadvance or overdraft (which will show as a CURRENT ACCOUNT with OVERDRAFT), no extra cost to the monthly fee that you are paying but a different type of account on your credit file, a limit, green ticks!

    The cash plus account itself is useful so why not use it if you are paying for it anyway!
    I have numerous qualifications in Business and Finance, Accountancy, Health and Safety and am now studying Law.

    Don't rely on anything I write as it may be wrong!!!
  • Moneymon
    Hi all,

    The ClearCash website shows credit builder is an available option. I want this to run with the credit builder of CashPlus.
    I also would like to buy some much needed items on several catalogues, and upgrade my mobile contact. How long should I wait between applications be without losing the benefit CashPlus can provide?
    • gregor123
    • By gregor123 25th Feb 15, 12:08 PM
    • 43 Posts
    • 2 Thanks
    gregor123
    Clarification
    Hi, I am a user of ClearCash and have been using it for a while and cannot sing it enough praise. Like Cashplus it offers the creditbuilder option.

    on the face of it, it looks like the Cashplus card is cheaper, but it isnt... although it has a monthly fee of £4.95 (ClearCash £9.95) it has a high ATM fee of £2 (ClearCash £0.50).

    Creditbuilder does work after month 3 but do not just load up a years worth of monthly fees...you have to demonstrate your ability to not only repay but also utilise the service. If you just load and leave it, you will be incurring dormancy fees... something that is clearly pointed out on the ClearCash website...

    It is known now as more of a current account and i see from their facebook page they now offer realtime loading at any Post Office whereas all others take1-2 business days.

    Anyone looking to improve credit rating i would highlyrecommend!
    KNOW THE VALUE OF THINGS, NOT THE PRICE
    • gregor123
    • By gregor123 25th Feb 15, 12:10 PM
    • 43 Posts
    • 2 Thanks
    gregor123
    Ah - forgot to mention that Creditbuilder is only available on pay monthly options for both providers - details of the instant loading available on the post office can be found here (if I am allowed to post?)

    http://www.clearcash.co.uk/card-loading/load-money-clearcash-icount-post-office/
    KNOW THE VALUE OF THINGS, NOT THE PRICE
    • gregor123
    • By gregor123 25th Feb 15, 12:11 PM
    • 43 Posts
    • 2 Thanks
    gregor123
    Did this work? Sounds like the easiest option
    Originally posted by Barpeeler
    i think it will for the first few months but then dormancy fees will come in so ensure you do at least one load or spend transaction - i read the terms thoroughly
    KNOW THE VALUE OF THINGS, NOT THE PRICE
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