The Main Components Of Determining A Credit Score
In order to improve your credit score to 800 and higher, you need to understand the main components for determining a credit score.
They are: Payment History , Amounts Owed , Length Of Credit History , New Credit , and Types Of Credit Used .
The weightings of each component are rough estimates that depend from person to person. For example, someone who just started taking out credit may have a lower percentage weighting in the Length Of Credit History component vs. someone who has used credit for over 30 years.
Lets discuss each category to help improve your credit score.
Re: How To Get Credit Score 750
Wait for more replies, but from what I understand….
your score should be at it’s highest when you have 2-4% utilization on one card. Then the the others report a $0.00 balance.
A mortgage, instalment loan, 3 credit cards .
no new accounts or inquiries within the last year
Average age of at least 7 years. Oldest credit line of more than 18 years.
—– Those are not easy to accomplish. Just do your best to hit as much of that criteria as possible.
How To Get Your Credit Score To 800 Or Higher: Complete Guide
Do you know your credit score? The three major credit bureaus, Equifax, Equestrian, and TransUnion, compile information from credit reporting agencies to calculate your credit score.
Our credit score determines our level of creditworthiness. When we want to take on debt, such as a car loan, mortgage, or a credit card facility, lenders look at your credit score to assess their risk in loaning you money.
If you have a credit score under 500, the chances of you obtaining any credit facility are slim. If a lender does decide to take a chance on you, then the facility will undoubtedly come with unfavorable terms, such as high-interest rates. This strategy helps banks to discourage you from taking on debt that you cant afford to repay.
However, if you have a credit score over 750, then lenders view you as a prime customer, offering you the best APR rates, and rewards programs to encourage you to use the facility. People who have a credit score of 800 or more are in the best financial position to apply for new credit facilities. Banks see these clients as low-risk, and they are willing to open any credit facility the customer requires.
So, how do you get your credit score over 800? Follow this brief guide of tips to help you reach the upper-echelon of creditworthiness.
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Good Credit Score Range For Auto Loans
When determining the interest rates for an auto loan, financial institutions typically rely on FICO® Auto Score 2, 4, 5, or 8. These scores range between 250 and 900. The higher the number the better the score. If youre shooting for the lowest possible APR on your auto loan your Auto credit score should be above 740.
We sampled auto loan interest rates from Unitus Community Credit Union to see how interest varied on a new car loan across a range of credit scores. The results can be seen in the table below.
New Auto Loans: Model Years 2014 and Newer
As with mortgages, the length of the loan also plays a huge impact in your rates. The longer the term on your auto loan, the higher interest you’ll pay. Having a good credit score can mitigate this negative effect.
Plan To Build Or Rebuild Your Credit History
The total length of your credit history accounts for 15% of your credit score. Having a negative, minimal, or no credit history will never help you reach a credit score of 800 or above.
If you wish to solve this problem, you need to plan on how to build your credit. You can start building it either by taking a or applying for your first credit card.
You might get confused if you are unaware of a credit-builder loan. You might end up assuming it same as a personal loan. But there is a big difference between the two.
A credit-builder loan is a personal loan but with the potential of adding a positive payment history to your credit report. In a traditional personal loan, money lenders deposit the whole loan amount in one shot.
However, in the credit-builder loan, money lenders do not deposit the amount together. Instead, money lenders deposit the amount in the savings account or certificate of deposit account. You get access to the amount once you repay the loan. As said, using a credit card is another way of building your credit history. However, if you are not interested in applying for a traditional credit card, you can use a secured credit card. When using a secured credit card, you will have to deposit cash from your collateral account, which is considered your credit limit.
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What Is The Meaning Of Having An 800 Credit Score
Inside This Article
If you have a credit score of 800 or above, the credit score is better than a good credit score. Considering the FICO credit scoring models, it is regarded as an excellent credit score. A report by FICO suggests that in April 2018, only 21.8% of Americans had their credit score in this range.
If you wish to reach this level of credit score, you must perform an excellent job in maintaining your credit history. In simple terms, you have a long credit history, no errors in payment history, have a good credit mix, and have used only a small percentage of the credit limit. Based on such good credit habits and excellent credit history, money lenders will consider you safe, rather than those with bad credit history & lower credit scores.
How To Go From 700 To 750 Credit Score
Here are some essential tactics to getting your credit to increase by 50 points in a relatively short time.
Its a fair enough question and it is more realistic than how to boost your credit score by 200 points in 30 days.
The time frame is the issue in that question, yet you can set put to boost your credit score by 200 points. how to go from 700 to 750 credit score, quickly, is a better sought after goal.
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The Benefits Of An 800 Credit Score
So what exactly do you gain by having an 800 credit score? Is this something you should strive for? Here are three benefits of having an 800 credit score:
- You’re more likely to have your applications approved. Remember that credit scores indicate your creditworthiness. Along with your other financial information, your credit score helps lenders predict whether you’ll repay the money you borrow. With a high credit score, lenders see you as a less risky borrower, increasing the chances that they will approve your credit.
- You’re more likely to qualify for lower interest rates. Your credit score is a major determining factor in the interest rate on loans. Having an 800 credit score will help you qualify for lower interest rates and save you thousands of dollars over the life of your loan. You’ll see the biggest impact with larger loans that you repay over a longer period of time, such as mortgage and auto loans.
- You’ll receive better credit card offers and pay less in interest. Regardless of credit score, everyone can avoid paying credit card interest by paying their credit card balance in full each month. An 800 credit score can help you qualify for credit cards that offer a 0% promotional rate on purchases and balance transfers. Having one of these credit cards in your wallet gives you the flexibility to carry a credit card balance and pay it off over time while avoiding finance charges on your balance.
Become An Authorized User
If you have a trusted family member with a good credit score, you have an opportunity to dramatically increase your credit score. You can become an authorized user of their account in order to boost your score.
However, this can be a taxing emotional burden. If you dont repay your debts, then you could hurt their credit score. Talk through the pros and cons with your family member before trying this method.
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Pay Creditors On Time
If you want to achieve an 800+ FICO score, then its vital that you pay all of your creditors on time. Paying your creditors a few days late can dramatically affect your credit score, listing you as a slow-payer. If you have a solid history of paying on time, with no defaults or late payments, you can expect your score to improve.
Avoid Hard Inquiries Into Your Credit Score
A hard inquiry into your credit scores comes from financial institutions when you are inquiring about a new credit facility, such as a mortgage, auto loan, or credit card. If a landlord checks your score, then the bureaus do not consider this as a hard inquiry.
If youre considering about taking on new debts, then shop around for the best rates, and make a list of your preferred providers. Start with the first lender on your list, and wait for their decision, before moving onto the next.
This strategy reduces inquires into your credit report, improving your FICO score.
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Sure You Can But Holding Onto It Can Be Fleeting
You may have been able to check your credit score lately using a number of free services including from your bank or mortgage lender. But, what good is knowing your FICO score if you dont understand what the number means on the overall reporting scale? Maybe you have a 740 FICO score. If the maximum score is 750, youre pretty much a credit genius. If the max is over 1,000, youre sporting a C averagenot really all that impressive.
So what is the highest credit score possible, and how do you achieve it?
Strategically Open Credit Accounts
Opening too many accounts in a short amount of time can have a negative impact on your credit score.
When you apply for credit, a hard inquiry is made on your credit report, which will dock your credit score a few points. So, the more times you apply for credit the more points that will be docked from your credit score.
If you have one or two accounts with low credit limits and havent opened any new accounts within the last six months, opening a new credit card account can improve your score.
This works because by opening a new credit account you are increasing your overall credit limit, which if you dont increase your spending habits, decreases your credit utilization rate. You could also achieve this by contacting your current credit providers and requesting a credit increase.
It cannot be stressed enough to spend only what you can afford to pay every month.
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Why You Should Be Pleased With An Exceptional Fico Score
A credit score in the Exceptional range reflects a longstanding history of excellent credit management. Your record of on-time bill payment, and prudent handling of debt is essentially flawless.
Late payments 30 days past due are rare among individuals with Exceptional credit scores. They appear on just 6.0% of the credit reports of people with FICO® Scores of 800.
People like you with Exceptional credit scores are attractive customers to banks and credit card issuers, who typically offer borrowers like you their very best lending terms. These may include opportunities to refinance older loans at better rates than you were able to get in years past, and excellent odds of approval for credit cards with premium rewards programs and the lowest-available interest rates.
You Get Lower Insurance Premiums
Several insurance companies consider checking your credit score before deciding your premiums. In case if you live in a city where credit-based insurance is possible, having an 800 credit score can get you discounts on your homeownersâ insurance or car insurance.
For example, if you have car insurance, you may save more than $1500 in your premiums if you have a good credit score. Whereas in case of a bad credit score, you may save up to $580 in your insurance.
How To Improve Your Credit Score From 750 To 800+
A credit score of 750 is on the brink of perfection, and you probably wont have to change much to join the 800+ credit score club. Your personalized credit analysis from WalletHub will tell you what needs improvement and exactly how to fix it.
A few things in particular tend to stand between a credit score of 750 and perfect credit, though. And if you do nothing else, make sure to take the following steps.
Best Cash Back Rewards Credit Card
Looking for a great cash back credit card thanks to your solid credit score? My favorite is the Chase Freedom Unlimited credit card. Given you know how to improve your credit score, its now time to reap the benefits!
- Earn unlimited 1.5% cash back on all purchases
- No annual fee because annual fees are terrible
- 0% introductory APR on purchases for 15 months
- Get a $200 bonus after you spend $500 in the first 3 months
- Redeem cash back with no minimums
- Rewards dont expire as long as your account is open
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An Excellent Credit Score Is Good Enough
You don’t need a perfect credit score to get the best deals. A score of 720 or higher is generally considered excellent. And scoring 800 or above qualifies you for the best terms offered.
Thats pretty great news if you aspire to get into the group of people who have top-tier credit but you dont want to obsess over every single point in an effort to get the highest score possible.
Get A Secured Credit Card
If your credit score is very low or nonexistent, and you dont have any credit cards, then consider getting a secured credit card.
A secured credit card is a low-limit card that a bank can issue to you, that requires you to pay them a security deposit up front. That way, their risk is low and they can afford to give a small credit line to people with low or no credit. Many of the major issuers, like Discover and Capital one, have good offers on secured cards.
Typically, the credit limits are tiny, like $200 or less. Pretty much the only reason secured credit cards exist is to help people build credit. Start making some purchases with the card, and pay it back in full every month. Over time, youll start building a positive credit history. Make sure your other payment types are paid on time as well.
Eventually, when your credit score is higher , ask your issuing bank to convert your account to a normal, unsecured card. This way, you can get a higher limit, get better rewards, and get your security deposit back.
Whatever you do, dont close your secured card, unless for some reason you absolutely cant handle having credit. You want to start building a long-lasting credit account, because average credit age is a big factor for your credit score. So, once your score is up, convert it to a better card.
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What An 800+ Credit Score Can Mean
The advantages of having an 800+ credit score are huge. Ilene Davis, a certified financial planner with an 800+ credit score, says she did a calculation on the mortgage payments for a $300,000 home loan for various FICO scores.
If the difference between payments for borrowers with the highest and lowest credit scores were invested at 6% a year, at the end of a 30-year mortgage the borrower with the highest credit score would have accumulated around $750,000. Thats a chunk of money worth improving your credit score for.
Feeling overwhelmed or like you are drowning in credit card debt? ACCCs Debt Management Plan may be your answer!
Our Debt Management Plan will help you consolidate your unsecured debt into one monthly payment and restructures your payments to make it more affordable.
A Debt Management Plan:
- Is designed to fit your budget
- Will reduce your interest rate on most credit card accounts
- Will reduce or eliminate the penalty fees