New year. New home? If buying a Ventura home in 2025 made it to your resolution list, you might want to start working on your credit score now. Why? I can take several weeks to a few months to bring a score up. And to net the best interest rates, you need to get your score in tip-top shape.
Tips to Improve Your Credit Score in 2025
Pull Your Credit Report
First things first. It helps to know where you stand at the moment. Go to AnnualCreditReport.com to obtain a copy of your current report from all three major credit reporting agencies: TransUnion, Experian, and Equifax. They used to only offer one free report a year. However, they currently allow one free report per week from each agency. Thoroughly look over each report.
Dispute Erroneous Information
First, start with fixing any errors you find. If you find any erroneous info (name, addresses you never lived at, accounts you never opened, etc.), go to the website of the agency with the wrong info (Experian, Equifax, TransUnion) and submit a formal dispute. Each agency’s dispute process is different. So make sure you follow their requirements. If you find the same erroneous info on different reports, file separate disputes with each agency. Remember that your disputes must include proof to back up your claims.
Collection Accounts
Next, look at your collection accounts. Older accounts may not impact your score much right now. Concentrate on more recent collection accounts. Talk to your lender before paying anything. They can direct you to which accounts you should pay to make the most positive impact on your score. Once you do that, contact the original creditor. Pay them directly rather than the collection agency. Make sure you receive a notice in writing from them that the account has been “paid in full” not “discharged”. Then, contact the agency that the collection was reported to and send them proof of payment.
Bring Those Balances Down
The lower your debt-to-income ratio, the better your credit score. That means bringing down your balances. Ideally, you want balances below 30% of your limit. For example, if your credit limit is $3000 but your balance is $1500, your usage is at 50%. Get that balance to $900 or below and you are now at 30% or below. Another way to get that score up without paying anything is to simply contact the creditor and request an increase in your limit. For example, if your creditor increases that limit from $3000 to $5000, your $1500 balance is now 30% of your limit without you paying anything extra to get it there.
Open a New Credit Card
It may sound counter-intuitive, but opening a new credit account may actually help boost your score. Your score may take a small hit when you initially open it. However, if you only use it sparingly and keep your balances low each month, it increases your overall credit available while decreasing the amount of utilization. In turn, that lowers your debt-to-income ratio. However, the most important part is to resist the urge to go crazy with charges and act responsibly instead. Otherwise, you just find yourself in a more dire situation.
Give Yourself a Boost
Experian offers something they call Experian Boost. This free service takes into consideration any payments you make on utilities, cell phone, and rent. If you faithfully pay these on time each month, you could see your score increase by several points.
Dave & Pat Zumbrun, your Ventura County real estate specialists
