You may have heard the old phrase that nobody’s perfect, but that doesn’t mean your credit score can’t be. On the FICO scoring model, a perfect credit score rings in at 850. However, less than 2% of scorable Americans have a perfect score. Though there are several different scoring models used across lending applications, the FICO scoring model is the one most often used. For those on the quest to perfect credit, don’t abandon hope. It is possible to achieve an 850 credit score.
How to Get a 850 Credit Score?
Getting the perfect score, like any notable achievement in life, comes with hard work. As it relates to your credit report, you need to understand all of the factors that impact your score.
1. Your Payment History
Covering 35% of your total score is your payment history. It is a tough category, with one missed payment potentially dropping your score dozens of points. If this happens, it is a long road to recovery, as damaging marks can stay on your report for at least seven years. According to FICO, around 96% of consumers holding the highest credit scores have zero missed payments on their records. The easiest trick to get to the top? Just make every payment on time for the lifetime of your account.
2. What You Owe
Your score will rise and fall depending on how much debt you hold and evaluated against how much available credit you have. This ratio reflects 30% of your credit score. Your credit utilization ratio should stay under 30% to get your score climbing higher. For those on their way to 850, the average amount of credit used should only be about 4% of what is available. Maxing out a credit card can potentially drop your score by 100 points. Keep track of what you owe.
3. How Long You’re Established
Length of credit history will create 15% of your score, and having a seasoned account (an account that has been open for more than two years) will positively impact your score in this category. Accounts that have been open for years but with negative marks for missed payments can damage your score for up to seven years, so positive accounts that are open for a long time will help you reach 850.
4. What the Credit Mix Is
Though the category doesn’t seem too complicated, it is still an important consideration for you to achieve a perfect credit score. At 10% of the total, pay attention to what accounts on your credit report. Strive for a balance between revolving credit and installment loans. This would mean have a credit report that includes things like credit cards, a mortgage, and an auto loan.
5. What Kind of New Credit Exists
Factoring the final 10% of your credit score is your tendency to look for new lines of credit. This category encompasses any new lines of credit established within the last six months to a year and any inquiries made. To earn the best score in this category and reach 850, you need to lay off applying for new credit for as long as you can.
Where to Get Help Reaching 850?
In addition to managing these factors on your credit score, there are several other ways to get your score to jump higher. For those who don’t have a credit history, it is possible to piggyback your score off someone who has established good credit. This could be done through opening a joint credit account or by having a family member or friend have you added as an authorized user to their line of credit. Coast Tradelines offers a similar service to those with poor credit or those who need to establish their own history.
Though using someone else’s credit is an easy way to lift your credit score, you have to be careful with this method. Whatever you do with your purchasing power will impact the host’s credit. Being an authorized user means you have purchasing power, but you do not have direct responsibility for paying the bill (unless privately arranged between you and the account holder). Irresponsible spending can make increase the utilization ratio, which will only bring the score down.
How to Keep an 850 Score?
The nature of life may make it impossible to keep 850 for very long, especially if you tend to spend more than you earn. Financial management is crucial for both earning an 850 and keeping it. Always check your credit report for potential errors and be sure to open a dispute if any information listed inaccurately. Check with both the lender and the credit bureau to correct the data. Keeping your credit under control and paying attention to these key factors of credit reporting will make it much more likely that you will join the top 2% of people with perfect credit.