Prosper Lending | Borrowing Tips

Many of you may know this already, but improving your credit score will help save a lot of money on interest rates if you carry any balances on credit cards and loans. Here are some things you can do to improve your credit rating.

• Do not close your unused credit card accounts - Having a high limit to balance ratio will improve your credit score. I found this out when I was applying for a car loan. Unfortunately, it was too late for me because I had already closed 2 big credit card accounts before applying for the loan.
• Do not ask to lower your credit limit - This goes along the same line as keeping a high limit to balance ratio. People who do this are generally doing it to control their spending, but it will wind up hurting their credit score. Instead, just cut up the card or shred it. Out of sight, out of mind.
• Pay your bills on time - This is a big factor in determining your credit score. Always strive to at least pay the minimum if times are rough.
• Lower your balances that you might have - Again, lowering your balance will increase your limit to balance ratio.
• Length of credit history - The longer you have your credit history established, the better. If you are 18 and you do not yet have a credit card, I recommend that you apply for one. People with short or no credit histories will usually have high annual precentage rates (APRs).

Following these easy steps will help you increase your credit score. You can even keep track of your progress by obtaining a free credit report once every 12 months.