Does an H&R Block Card Affect My Credit Score?

The H&R Block Emerald card -- a prepaid card which requires you to load funds from direct deposit payroll or at an authorized retailer -- might save you hundreds of dollars in checking fees and build some type of credit history. If you want to use this card to improve your credit history with the national credit reporting firms, you are out of luck. The only way this card can build history is through an alternative agency, which lenders may or may not accept.

Identification

As of 2011, the only creditable account H&R Block offers is the Emerald Prepaid MasterCard. Prepaid cards do not build a traditional credit history with the major credit bureaus like a regular line of credit would. The major credit bureaus do not have enough evidence to suggest whether or not prepaid accounts help predict a borrower's willingness to repay, according to Maxine Sweet of Experian.

Alternative Credit History

While the national credit bureaus won't accept history on a prepaid account, you can build history on the card by reporting it to an alternative credit agency. Alternative agencies keep a database of credit histories that contain nontraditional data that the national bureaus do not pick up, such as utility payments or anything else the consumer can prove.

Benefits of Alternative History

In 2011, most lenders, and even the national credit reporting bureaus, are accepting alternative credit histories because they can have as much predictive power as a traditional history. The Federal Housing Administration, one of the largest backers of mortgages in the U.S., accepts nontraditional payment history for its loans.

Tip

While lenders might accept an alternative payment history, building a traditional credit history is still the best option to obtain loans, because almost no lender will reject a report from one of the national credit bureaus. Nearly everyone qualifies for some kind of account that builds credit history. Banks almost always approve applications for secured cards, for instance, because a secured account requires collateral that makes them extremely low risk. Retail store and gas cards also tend to have low-credit requirements.