Had bad credit for years, it got written off after 7 years, now I have no credit history. Was looking to find a way to quickly build my credit score back up, now that I'm older and wiser. Here's what I found and how I started.
My FICO score was below 550. I first started looking for prepaid credit cards to get a credit history going. After doing some research, I came across some innovative banking institutions with novel credit/debit cards.
The first is the Neo Mastercard. At first glance, it looked pretty normal, so I applied and instantly got approved. It just asked me for my name, other info, yada and then to take a pic of my provincial ID (I don't have a driver's license - don't ask) and a selfie.
I got a virtual card right away. All I had to do was interac some money on to it from my main chequing account from my regular bank (who wouldn't give me credit of any kind) and voila - the money I sent was put as credit and I could start making purchases online right away. What's really cool that I found out later is that you can set your own credit limit by continuing to send interac transfers to the Neo Mastercard account. Add the money and your credit limit is instantly raised!
Then they started asking me to make payments towards the credit (debt) that I had accumulated. WTF? I didn't get it at first, but if you think about it, you're just clearing up the money that you set as your credit limit. Still confusing, I know. Think of it this way - if you have a debit credit card and interac $500 to it and spend that $500 online, then you are out the $500. Next time you want to spend $500, you have to interac $500 to that debit card again. Spend, repeat, spend, repeat. With the Neo Mastercard, however, you interac that $500 and spend it. Send and repeat again. But, with this card, the $500 is your credit limit, which the credit bureaus can see and Neo reports this to.
You can still have that $500 listed as spent and instead of clearing it out by interac-ing another $500, so you can spend again, you can just add that interac-ed $500 to your credit limit. So, now you have a credit limit of $1000, $500 of which is full and $500 of which you can spend. You pretty much get set your own credit limit. How clever is that?!!
Now, you do have to pay interest on the amount that you have on credit, which is pretty much like any credit card. But, if you get a raise, sell an an old baseball card that now has some value or get a second job - you can clear that debt out. In bank lingo, this means that you have a lower revolving debt, which Neo also reports to the bureaus.
And as your credit limit increases and you clear out your debt, your credit score goes higher. What an ingenious way to build credit! I love this new generation with what they call their social entrepreneurship. It's a win-win for everyone. The banking institution gets to make profit and you get to build your credit without any limits or hassles. You don't have to call anyone, it's all done online.
Some other advantages I found were:
1. You can instantly freeze and unfreeze your credit card. Say, you set autopay for a certain service or subscription, but something came up - like little Johnny needed some new shoes. You can buy those shoes before your payment for the sub becomes due, freeze the card and then unfreeze it when you have the dough to interac back on to the card. It literally takes second to freeze/unfreeze.
2. They have cashback rewards that are actually useful. If you use your Neo Mastercard for Uber or streaming apps like Netflix and Disney, you get cashback. It's usually a nice chunk. We're talking tens of dollars and not pennies.
So, TLDR;
if you want to build your credit history back up the quick and easy way, there is a solution: the NEO Mastercard. Below, you will find my referral link to the Neo Mastercard. If you use it, they will give you $25 free on it, when you interac your first $50.
Use my link to join Neo and get:
A WELCOME BONUS <--click there