The concept of using credit cards to build creditworthiness has become very popular post economic recession, as there are several people, who are attempting to repair their credit reports and improve their scores. The biggest advantage of applying for a prepaid credit card is that its application is never declined, and the score definitely improves with the use of it. How Do they Build Credit? Credit card companies have a substantial control over your credit score and so do the other lenders. These lenders and companies keep on reporting information to agencies such as Experian, Equifax, and TransUnion, which keep a track of your credit related activities, reports, and most important of all, your credit score. When the company or a lender reports a non-payment or late payment of a bill, the score is brought down, and on the other hand, in cases where a timely payment is reported, it goes up. These cards work in the exact opposite manner as their conventional counterparts. When you get a prepaid credit card approved, the company gives you an account, in which you need to transfer or deposit a sum of money. This way, it gets charged with the sum deposited in the account, and the money can be spent through it. Now, in such instances, companies give a positive report to the consumer reporting agency, when you deposit the said money into the account, thereby increasing your score. Some companies, however, provide the same, after you swipe the card and conduct the transaction. Thus, your score keeps getting steadily improved with each transaction; all you need to do is feed the account with money and keep using that card. The only common thing between a prepaid and conventional credit card is that the company charges a membership fee, and also, an APR (Annual Percentage Rate) in both the cases. In certain cases though, if you own other such cards, or are a long-time customer of the company, then you can also get one with no fees. Best Prepaid Cards for Rebuilding Almost all credit card companies make and operate accounts for prepaid cards. The best prepaid card is the one that charges less fees, and at the same time, reports to almost all the consumer reporting agencies. There are some cards that have a certain overdraft facility, which means that the card can be used to spend more than the money deposited in the account. Here are some classic examples:

• SilverCard Prepaid MasterCard
• Walmart MoneyCard Visa Prepaid Card
• Capital One Reloadable Prepaid MasterCard
• READYdebit Visa Prepaid Card
• BabyPhat Prepaid Visa RushCard

Using such cards is a great way to increase the credit score in 30 days, or even increase it after bankruptcy. It must be noted that these are different from common debit cards, as the debit card provider does not report to the consumer reporting agency, and none of your timely payments affect the score.