Suze Orman’s Prepaid Card Won’t Help Your Credit Score

Suze Orman’s Prepaid Card Won’t Help Your Credit Score

NEW YORK (MainStreet) — Suze Orman’s new prepaid card may be paired with free credit monitoring services, but users shouldn’t expect the product to have any impact on their actual scores.

While major credit bureau TransUnion is partnering with Orman on her latest venture by providing users of her prepaid card with access to their credit reports and accompanying score, it hasn’t amended its current practice of excluding prepaid debit cards from credit reports. 

“Our goal is to help Suze understand whether including this data in a consumer’s credit report would impact access to credit products,” Colleen Tunney-Ryan, a spokeswoman for TransUnion, says. “It is important to understand that this data will not appear on any TransUnion credit report at this time.”

As previously reported, the other two major credit bureaus, Equifax and Experian, also exclude information on prepaid and traditional debit cards from credit reports, since despite their physical resemblance to credit cards, prepaid cards are not actually backed by a credit line.

As a side note, some smaller credit reporting agencies do incorporate prepaid card data on their reports, but those aren’t usually commissioned by mainstream lenders.

To be fair, Orman isn’t promoting the card as a means to build credit.

“The Approved Card is my answer to those who are looking for a better way to bank, use plastic, and feel secure knowing that their interests are being put before fees and profit motives,” Orman said in a written statement. 

However, the distinction is important to note, since those looking to build credit are better off applying for a secured card, which requires customers to put down a sum of money upfront to cover the line of credit and thereby minimize the risk of default, in lieu of prepaid alternatives, which are essentially debit cards without a checking account.

This is because while some issuers don’t report payment history on secured cards, they are in the habit of letting responsible users upgrade.

“What they’ll let you do instead, if you manage the card well, is convert it to a traditional account that will establish credit,” Rod Griffin, director of public education for Experian, said in March.

What are some of the better secured cards on the market? Find out in MainStreet’s roundup of great cards for college grads.

Back to Top