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Main site > Forums > Essential Money > Credit File & Ratings > Need to rebuild a bad credit history? New ‘last r...
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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.

    Users saying Thanks (7)

Page 2
    • User avatar
      User avatar
      blissfulbabe
      • 156Posts
      • 172Thanks
    • blissfulbabe
    • By blissfulbabe 9th Apr 08, 1:42 PM
    • 156 Posts
    • 172 Thanks

      What's this?

    blissfulbabe
    Hi

    I applied for this card last week and was accepted without having to send any documents - they do online electronic checks (I presume the electoral register) and if they are happy with the results then they don't need any further proof of ID - to issue a card, but...

    I have just spoken to Customer Services (call 020 7100 5850 instead of the 0871 number) about the credit builder facility. To be able to use this facility you need to become a verified member. You can do this by sending two forms of ID (full list available at http://www.mycashplus.co.uk/faq/getting-my-cashplus-card.aspx#upgradeFullAccnt). Once you have been verified then you have a print off the application form for the credit builder facility, fill it out and send it off. So it's not quite as simple as I originally thought.

    I'm only going down this route as I have a sub-prime mortgage and will have to remortgage in December and anything I can do to improve my credit record has to be a good thing (currently on a long, long term DMP).
    Don't judge people on they way they look, the way they speak or what they're called because they can't help that.

    Only judge people on what they say and what they do.

    Users saying Thanks (3)

  • Baron_Greenback
    They report back to the credit reference agency after 3 successful payments and then monthly thereafter, on completion you can renew creditbuilder.

    As they loan you the money to pay for the annual subscription you are effectively getting a free prepaid card that is one of the few on the market that is a mastercard as opposed to a maestro card. for this reason i subscribed to the cashplus card anyway (good for mobile phone companies who dont like electron when taking out a contract) and have been using it for about 4 months and am very happy with it although I would prefer to make top ups on-line via a debit card payment than either a post office or standing order.

    I am still waikting for the creditbuilder to credited, i had an email confirming acceptance and that they would send a replacement card within a month (about 3 week ago)

    all in all, i'd say this is a good product, the card looks nice, works well, has a reasonable on-line interface, is well branded with having a mastercard and as such is accepted pretty much anywhere... with the credit builder attatched this card is effectively free which I think would make it probably the best on the market.
    Last edited by Baron_Greenback; 11-04-2008 at 11:03 AM.
    spreading the MSE love

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  • Baron_Greenback
    Although it is worth mentioning that any money you put in your cash plus account is NOT covered by the FSA compensation sceme so it they go belly up you lose your money. I basically use this card to help me budget fro the month by loading my monthly food allowance on.

    The company seems fairly liquid but when they are lending all their customers £60 with no interest effectively cutting their monthly fee off you have to ask a few questions!

    Either they are a very ethical company genuinely interested in their customers welfare or they are committing financial suicide!... I hope its the former!
    spreading the MSE love

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  • ChrissieH
    Car Hire
    Does anybody know if you can use the cashplus card to hire a car abroad?

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  • bec22
    @ChrisseH: yes, from their leaflet -

    "If you want to hire a car in the UK or abroad, we will need to switch this service on! Just call our Customer Services team and we will complete a car hire account review for you".

    Foreign transactions are charged at 2.75% of amount withdrawn/spent so I assume this would apply if you were hiring a car abroad.

    Sorry!

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  • bec22
    To add to my previous post, I thought it might be helpful to pass on the following:

    I've just spoken to Cashplus customer services and the £4.95 is taken out roughly every 29 days, so the date will change every month - important to keep on your toes with it, I plan to leave enough to cover it in the account just in case.

    Also, I asked to opt out of text updates - it sounds like these otherwise may happen automatically if you top-up at a post office, not sure what the text fee would be but don't fancy any hidden extras!

    I found it quite easy to apply, and it looks like it will be simple to get creditbuilder on top once I've sent the form in. It might be a bit harder if you're not a UK citizen or, as a previous poster mentioned, if you don't have a driving licence or passport.

    There are a few minor typos on their information (such as driving 'license' not 'licence') and the odd grammatical error, which tends to make me a little wary... However they do say 'we are one of the only prepaid companies to offer you the security and protection of section 75 of the Consumer Credit Act. This is the same level of protection offered by all major credit card brands, even though we don't offer a credit card.'

    Anyone know any more about section 75 and the protection it offers?

    Users saying Thanks (2)

  • HabitAddict
    Section 75 of the Consumer Credit Act
    Section 75 of the CCA allows you to claim back money from the credit card provider in the case you bought some goods worth at least £200, you wanted a replacement/repair/refund, and the retailer who sold you the goods went out of business. This is the "protection" that the Cashplus leaflet refers to.

    Users saying Thanks (1)

  • Archaeopteryx
    Multiple Prepaid Cards?
    Is there any advantage (in terms of credit rating etc) to having more than one Prepaid Card, with different providers?

    I'm thinking about getting only one, but just wondered...

    Thanks

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    • User avatar
      User avatar
      Snooze
      • 1,946Posts
      • 3,437Thanks
    • Snooze
    • By Snooze 21st Apr 08, 5:15 PM
    • 1,946 Posts
    • 3,437 Thanks

      What's this?

    Snooze
    If you just want to build your "zeros" on your credit file then you don't need a prepaid card or in fact any card at all.

    Just create a new account with SimplyBe (catalogue co.) or any of the JD Williams Group of companies and buy the cheapest item they have. I bought some decals for kids toys and including delivery it was under £6. Wait for the statement to arrive at the end of the month and then pay it back in full by paying cash over PO counter (you'll have to pay the couple of quid PO fee) and then SimplyBe will start reporting each month on your credit file with a nice "zero" (ie. you've paid on time) even if you never buy anything from them again.

    Rob

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      magicgirl
      • 596Posts
      • 2,217Thanks
    • magicgirl
    • By magicgirl 21st Apr 08, 9:52 PM
    • 596 Posts
    • 2,217 Thanks

      What's this?

    magicgirl
    a lot of ppl trying to rebuild credit cannot get catalogues. i am discharged bankrupt and want to start rebuilding my credit but too scared to apply until i have cleaned up my file as more refusals will only make my credit worse.
    Proud to be Member of BSC #92

    Hoping to get debt free again

    working hard to make my daughters proud

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  • Archaeopteryx
    Similarly, I cannot get catalogues, 'puter says 'no' apparently...
    :confused:

    So, still wondering about whether to try for a couple of prepaid cards...

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    • User avatar
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      superduperloop
      • 61Posts
      • 330Thanks
    • superduperloop
    • By superduperloop 26th Apr 08, 10:33 PM
    • 61 Posts
    • 330 Thanks

      What's this?

    superduperloop
    Hi all. Have started the process to get this card today. As a discharged bankrupt, can't get catalogues and want to start rebuilding my credit score. I had to apply in one of the retail stores as they didn't have my address when I tried to apply online. Took me 10 minutes in the shop.
    Seems like it might take me a while to get the credit builder option up & running, but hopefully it'll be worth it. Thanks for all the posts on this, they're a great help!

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  • Nikinakinoo
    Thanks
    Im new to this awesome site and am totally grateful as for the past two years ive been up to my eyes in debt.Mainly from Bank charges mounting up & my wages just covering them each month!!!!Thank you everyone...I thought i was on my own...Oh,i signed up for a card like this aprox 10 months ago..Bit concerned as i thought you only paid £4.95 a month when you used it!!!
    Umm! What do you do if ive cocked it right up...?

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  • bec22
    “
    Im new to this awesome site and am totally grateful as for the past two years ive been up to my eyes in debt.Mainly from Bank charges mounting up & my wages just covering them each month!!!!Thank you everyone...I thought i was on my own...Oh,i signed up for a card like this aprox 10 months ago..Bit concerned as i thought you only paid £4.95 a month when you used it!!!
    Umm! What do you do if ive cocked it right up...?
    Originally posted by Nikinakinoo ”
    I'd suggest you ring them up and check first off, if you're worried. There are two different payment plans as I understand it - don't have leaflet to hand but these are on their website, so you need to check which you are on. The one I have, you've got to have £4.95 in the account each month for charges, but I think the other one you just pay when you use? - sounds like it would be handy to know which you've got.

    If you're worried about your debt you could ring the Consumer Credit Counselling Service (CCSS), they are brilliant and gave frank independent advice when I was in a similar position to you. It's best to do something about your debts as early on as possible rather than let them mount up. CCSS can probably give advice about what to do if you have 'cocked it right up' too!

    Also, don't forget you can reclaim your bank charges! - loads of info about that on this site and the forms available for download.

    Users saying Thanks (1)

  • M|B
    “
    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.
    Originally posted by MSE Dan ”
    I applied for this yesterday as I thought it may come in handy for emergency use really.

    On checking my Callcredit report online today, under the recent searches is this info:

    “
    Search Organisation: BT (ID)
    Search Unit Type: Advanced Payment Solutions Limited NC
    Search Purpose: Money Laundering
    ”
    I'm assuming it's them - but I thought there was no credit check and also "Money Laundering"??!!!!

    There's no search on Equifax though, odd - what's all this about?!

    Thanks.

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  • srichards
    Im beginning to get myself sorted and pay off my debts, and Im thinking about getting one of these cards to start rebuilding my credit.

    Could I just get one, load £60 to it, leave it and not use it?

    That way there is always the £5 there for the monthly charge.

    Would this work?

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  • Zelie
    “
    Im beginning to get myself sorted and pay off my debts, and Im thinking about getting one of these cards to start rebuilding my credit.

    Could I just get one, load £60 to it, leave it and not use it?

    That way there is always the £5 there for the monthly charge.

    Would this work?
    Originally posted by srichards ”
    I initially wondered that so loaded it up with sufficient money. But I've had a rethink as it will be a nice way to force myself to stick to budget when doing the weekly shop. So it's not only good for rebuilding credit but it helps to save money.

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    • User avatar
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      marc.faulkner
      • 635Posts
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    • marc.faulkner
    • By marc.faulkner 31st May 08, 12:24 PM
    • 635 Posts
    • 735 Thanks

      What's this?

    marc.faulkner
    “
    I applied for this yesterday as I thought it may come in handy for emergency use really.

    On checking my Callcredit report online today, under the recent searches is this info:

    I'm assuming it's them - but I thought there was no credit check and also "Money Laundering"??!!!!

    There's no search on Equifax though, odd - what's all this about?!

    Thanks.
    Originally posted by M|B ”
    It's an ID and anti money laundering search, that's all.

    If they've been able to verify your ID using the search, you shouldn't need to supply any documentary evidence. Don't worry, it's not a financial credit check!

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    • User avatar
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      NekoZombie
      • 1,623Posts
      • 1,505Thanks
    • NekoZombie
    • By NekoZombie 5th Jun 08, 12:57 PM
    • 1,623 Posts
    • 1,505 Thanks

      What's this?

    NekoZombie
    “

    As they loan you the money to pay for the annual subscription you are effectively getting a free prepaid card that is one of the few on the market that is a mastercard as opposed to a maestro card.
    I am still waikting for the creditbuilder to credited, i had an email confirming acceptance and that they would send a replacement card within a month (about 3 week ago)
    Originally posted by Baron_Greenback ”

    Just to clarify as I have now been through the process;

    the credit builder service costs £59.95 per year. Cashplus will pay this on your behalf. Every month you then pay £4.95 towards the credit builder facility. In effect you are getting the credit builder service for free, not free use of the card. At no point will the loan amount actually be placed onto your card (like I thought it would). In essence they are not really loaning you anything as you never actually see the cash!

    I have therefore cancelled this service as I already have a mobile phone that I pay for every month which makes a report on my credit file for free. In addition I was previously using the flexi service on cashplus (£1 for each transaction) which I personally find more cost effective as I rarely need to use the card.

    The creditbuilder service will be good for those who use their cards a lot though, or those who already pay £4.95 a month, as you will be no worse off.
    BCSC Member 70
    .

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  • bb23
    im hideous at managing my financed, i always write a plan out each month but go over EVERY month. i have a bad bad bad credit rating and i've just ordered one of these cards to see if it can help me repair my credit a bit and have decided to load my £190 a month food/shopping budget on there cuz i do find i buy a lot of junk each month.

    im responsible for 2 small baby girls so i MUST learn to be responsible for myself!!!
    i really hope this helps me
    Debt at start (Aug 2003): £13,500 >>Debt Now (Aug 2013): £3,104
    HSBC charges WON (april 07): £1,103.00
    HSBC PPI WON!!! (July 08): £1,166.00
    HFC PPI WON!!! (August 08) £2,100

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