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.
Do You Really Need An 800 Credit Score
An 800 credit score will certainly get you bragging rights, but dont panic if youre not there yet. The good news is youll qualify for the best lending terms and lowest interest rates if you have a good credit score in the mid-700s. Regardless of where your credit is at, to improve your credit score, youll need to do the following:
- Make on-time payments. By making on-time payments for six months to a year, youll start seeing improvements to your FICO scores. Within two years, the damage from late payments will also start to fade.
- Lower your credit usage. Paying down your credit card balances and asking for higher limits will increase your credit score. Reducing credit card debt has a bigger impact than paying down a car loan or student loans because it lowers your credit utilization.
- Be patient. Credit history takes time to build. No one gets an 800-plus credit score overnight. Stick with your oldest account to maintain the highest credit age possible.
- Be vigilant. Use a free credit monitoring service so that youll get alerts about any changes to your credit report. Also be sure to check your credit reports with the three major credit bureaus Equifax, Experian and Transunion once a year using AnnualCreditReport.com. Dispute any information thats inaccurate directly with the credit bureaus.
How To Get Excellent Credit: 5 Expert Tips
1. Always pay on time. Always.
Payment history heavily influences your credit score. In fact, it is the most influential factor for FICO and VantageScore.1 To stay on top of your payments, set up a calendar reminder or enroll in automatic payments. The on-time payment goal applies to all your bills, including utilities, rent and cell phone service.
What if you were late on a payment a few years ago? While late or missed payments can stay on your credit report for seven years, the impact on your credit score decreases over time.; Most negative items have little impact on your score after two years2 so be patient, keep making timely payments, and youll soon be on your way to an excellent credit score.
2. Optimize your credit utilization ratio.
is another key piece of your credit score puzzle. Credit utilization measures the balances you owe on your credit cards relative to your cards credit limits. Its calculated on an overall basis .
The general rule of thumb with credit utilization is to stay below 30%.3 This applies to each individual card and your total credit utilization ratio. Strategies for improving your credit utilization ratio focus on reducing the numerator and managing the denominator .
Try one of these techniques to improve your credit utilization ratio:
3. Regularly monitor your credit scores for inaccuracies.
4. Be strategic about taking on new debt and closing accounts.
5. Consider your credit mix.
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Perks Of Having A 800 Credit Score
800 Credit Score Benefits:
- Get Big Initial Credit Card Bonus
- Upgrade to better cards with greater rewards:
- No-Foreign-Fee Credit Card
- Get Lower Interest rates on cards, loans and higher credit limits: Call your current creditors and ask for a better deal or you can research a 0% balance transfer card deal.
- Refinance Your Car or Homes
- Best Mortgage Rate
- You Can Qualify For Auto Loans with 0% Intro Rate
- Lowest Auto Insurance Premium
Open A Secured Credit Card
If you dont qualify for unsecured credit cards, then a secured card could be the way to go. Secured credit cards are backed by a cash deposit, so even borrowers with poor credit scores can get one. Through this card, youll be able to improve your credit score by proving your creditworthiness with on-time payments.
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Establish A Long Credit History
Lenders typically view borrowers with short credit histories as riskier. To reach an 800 credit score, you’ll need to establish and maintain a long history, so keep those old accounts open even if you don’t use them anymore and have no balance instead of having them removed from your credit report.
Only Spend What You Can Afford
Dont use a credit card to live beyond your means, or to roll over the costs of everyday expenses to the next month, Nitzsche recommends. This will only lead to spiraling debt that will be difficult to get out of.
People with an 800+ credit score dont apply for more credit than they can afford and dont spend more than they earn.
While using a credit card for everyday expenses is OK if you can pay the credit card bill off in full each month, while gaining awards points in the process, dont let the accumulation of points convince you to spend more, Nitzsche says. And if youre running to your credit card when your car, refrigerator or something else breaks down, start an emergency fund to pay for such repairs.
Bill Balderaz, president of Fathom Healthcare, has an excellent credit score and attributes it to his family living below their means. As our income rises, we keep our spending flat, Balderaz says.
They also pay off all credit card bills each month, pay off their vehicle loans early, and have paid off their mortgage early to help get them to an 800+ credit score.
Their excellent credit score has allowed them to get the most preferred loan rate. After three houses and eight vehicles, Balderaz estimates theyve saved tens of thousands of dollars on loans by getting the lowest loan rates.
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Keep Your Credit Utilization Below 30%
Most credit card companies prefer borrowers to keep their information up-to-date, such as your annual income and whether youre currently renting or own a home. If you applied for a credit card a few years back and now have a higher income, you can then update your profile and see if theyre willing to increase your available credit. While its not advised to use this new credit right away, this can help increase your credit score since youll technically be using less available credit.
You can also request a credit increase for certain credit cards, especially if youve exhibited good credit borrowing habits over the past year. Both options will allow you to improve your credit utilization as long as you refrain from using credit cards for upcoming purchases.
You Can Get Your Dream Job
Some employers include credit checks as part of the employment process. It isn’t enough to have education and experience anymore; they want to make sure you know how to manage your personal finances before they trust you with the company’s finances. This is especially common with government jobs and jobs in the finance industry.
An 800+ credit score can push your application to the top of the pile. Let’s say three people applying for a particular job have the same amount of education and experience, yet two people have a credit score in the 600s and one has an 800 score. If the employer feels each applicant is a good fit for the position but can only choose one, there’s a good chance he’ll select the person with the highest credit score.
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Is That High Score Worth The Effort
The good news is that many lenders consider 760 the cutoff for excellent credit. With a credit score above that number, you’ll receive most of the same benefits as someone with an 800 credit score. You’ll just have to work a little harder and wait a little longer if you also want the bragging rights.
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What A Fair Credit Score Means For You:
Borrowers within the “fair” credit score may push interest rates higher for their lines of credit. Borrowers in this range may incur higher charges associated with a loan or line of credit. It may be difficult to obtain a 30-year mortgage at the lower end of this range and you may expect higher interest rates. Auto loan APRs may have higher rates and credit cards may have lower limits and higher APRs.
How To Increase Your Credit Score
Now that you know a little bit more about credit scores, you might be motivated to increase yours. Luckily, there are many ways that you can work to improve your score. Dont be discouraged if youre unable to increase your credit score overnight. It will take some time, but it will happen with intentional steps.
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How To Improve Your 800 Credit Score
A FICO® Score of 800 is well above the average credit score of 704. It’s nearly as good as credit scores can get, but you still may be able to improve it a bit.
More importantly, your score is on the low end of the Exceptional range and fairly close to the Very Good credit score range . A Very Good score is hardly cause for alarm, but staying in the Exceptional range can mean better chances of approval on the very best credit offers.
Among consumers with FICO® credit scores of 800, the average utilization rate is 11.5%.
The best way to determine how to improve your credit score is to check your FICO® Score. Along with your score, you’ll receive a report that uses specific information in your credit report that indicates why your score isn’t even higher.
Get Negative Information Removed From Your Credit Reports
If you happen to have negative items on your report, it is possible to get them removed. You have a couple of different options. One is to request a goodwill adjustment from the creditor who reported the late payment. This is a great tactic for long-time customers who rarely make a late payment.
If you still owe the money, you can also negotiate to have the item removed from your credit report by agreeing to sign up for automatic payments on the money you owe.
You can also request that a late payment entry be removed if the information is inaccurate or the creditor cannot verify the information within the required timeframe.
Another option is disputing the negative items with the credit bureaus. By law, you have the right to dispute any information contained in your credit report that you deem to be inaccurate, incomplete, unverifiable, obsolete, or questionable. can help you with this.
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What Is The Average Credit Score In Canada And How Do You Compare
What is the average credit score in Canada, and how do you rank among average Canadian credit scores? More so, what is a good credit score in Canada?
Often, Canadians want to know how they measure up to other people when it comes to their credit score. Is your credit score better than the average credit score? Maybe its worse?;
First, let’s answer the question you are here to find out:
What An Excellent/exceptional Credit Score Means For You:
Borrowers with exceptional credit are likely to gain approval for almost any credit card. People with excellent/exceptional credit scores are typically offered lower interest rates. Similar to “exceptional/excellent” a “very good” credit score could earn you similar interest rates and easy approvals on most kinds of credit cards.
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Upgrade To Better Credit Cards
Some people like the status quo, sticking with the same cards they first opened in their early 20s. While thats great for length of credit history purposes, you could be missing out on big rewards and benefits especially with a soaring score.
Excellent credit scores will qualify you for the latest rare metal or expensive jewel-named cards whether its platinum or diamond or black, says Griffin. To see which cards you now qualify for, use . By inputting a few key details, CardMatch will pull up card offers based on your credit standing, and no hard inquiries are generated.
The first thing I did was call my brother because he was the only person in the world who knew how low my score was. It was a great feeling. It gave me a sense of pride, swagger, and I felt that I had clout.
Rewards cards earmarked for the most creditworthy borrowers also offer more opportunities to earn cash back and airline miles at a faster rate. With scores in the 830 range, Holly Johnson, frugal travel and credit expert at;ClubThrifty.com, regularly takes advantage of new offers as they become available. We frequently sign up for new cards for travel perks and huge sign-up bonuses that let us travel the world more affordably and more comfortably, says Johnson.
How To Get An Excellent Credit Score
If your credit score falls within the good, fair or bad ranges and you want to get an excellent credit score, follow these tips to help raise your credit score.
- Make on-time payments. Payment history is the most important factor in your credit score, so it’s key to always pay on time. Autopay is a great way to ensure on-time payments, or you can set up reminders in your calendar.
- Pay in full. While you should always make at least your minimum payment, we recommend paying your bill in full every month to reduce your utilization rate. .
- Don’t open too many accounts at once. Each time you apply for credit, whether it’s a credit card or loan, and regardless if you’re denied or approved, an inquiry appears on your credit report. Inquiries temporarily reduce your credit score about five points, though they bounce back within a few months. Try to limit applications and shop around with prequalification tools that don’t hurt your credit score.
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Monitor Your Credit Score
Make sure to check your credit score regularly. Many popular provide you with an updated credit score every week, along with an analysis of why your score might have changed. Learn what is likely to raise your score and what is likely to lower it, and avoid anything that might bring your credit score down.
Consolidate Your Current Debt
Consolidating your current debt is a great way to start tackling existing debt with less payments and a lower interest rate. Lets say you have two credit cards, each having a different balance and interest rate. Instead of making two separate payments on each card, you can get a credit repair loan that allows you to pay off the existing balance of both accounts with one loan. Now youll only have one payment each month with one interest rate, making it much easier to pay down your credit card balance in less time.;
This approach can also be applied to student loans. When you refinance your student loans with one main loan, you can pay down the balance much faster with a lower interest rate, removing the stress of making separate payments for each student loan.
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Habit : They Dont Cancel Old Credit Cards
People with top-notch credit rarely cancel old credit card accounts, even if theyve paid off the balance. The reason is twofold: When you close a card, you lower your available credit, which increases your utilization ratio. Unless its one of your newer cards, you also lower the average credit age, which determines 15% of your score.
Andrew Chen, founder of the website Hack Your Wealth whose credit score is over 800, suggests only canceling old accounts if youre sure youre not going to use the card again, the annual fee is expensive and the card is relatively new, ideally less than two years old.
I especially urge closing card accounts that have no annual fee, Chen said. It costs you nothing to keep the card, and it helps your credit score to have seasoned credit accounts on your credit file.
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