Do You Need An 800 Credit Score
Have you always been insatiably curious about your credit score? I am. In my mind, my credit score is kind of like a report card, like a race toward personal best.
Despite widespread media reports of Americans’ debt challenges, most consumers have credit scores that fall between 600 and 750. More good news: In 2020, the average FICO Score in the U.S. reached a record high 710, according to Experian.
So, speaking of an 800 credit score what is it and should you work toward achieving it? Let’s dive in.
Number Of Americans With No Credit History
According to the Consumer Financial Protection Bureau , approximately 26 million adults are considered to be credit invisible, meaning they have no as theyre without credit cards, loans, and other lines of credit.1
Of course, if you have a credit card, that doesnt necessarily mean you will have a credit score. Around 19 million adults lack a score altogether due to credit reports with minimal credit usage or out-of-date credit history. Nows the time to open a credit card or loan to build your history.
The Credit Score Needed To Buy A House
Your FICO score plays a major role in your ability to secure a mortgage. The type of mortgage that youre looking to secure will determine what your score should be. According to QuickenLoans, these are the following credit scores you need to work with lenders14:
- Conventional Mortgage: 620
- FHA Loan With 3.5 Percent Down: 580
- FHA Loan With 10 Percent Down: 500
If you fall below these guidelines, ask yourself, how long does it take to build credit? Then, come up with a plan of action to help you work towards your goal.
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What Type Of Financing Can You Get
If you are looking for personal loans, boat loans, car loan, RV loan, car leasing, conventional mortgages, FHA loans, small business loans or looking to take advantage of fallen interest rates by refinancing an existing loan, nothing should be hard for you. The likelihood that you will be denied any financing with this credit score is extremely low, and it is just up to you to make sure that you continue managing your credit well.
Credit Score: Personal Loan Options
With a score this high, you wont face any problems securing a loan. Your personal loan interest rates for credit score 788 and above should range from 13% to 15% on average, but lower rates are definitely available. Shopping around will be in your best interest, because youll qualify for nearly every loan. However, be sure to do your shopping in a brief period of time so your credit score doesnt take a dip.
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Is It Possible To Get A 900 Credit Score
There are only a couple of methods for achieving an 800-point credit score. For your calculations to succeed, focus on 800 rather than 900. is considered perfect. A high score is likely to add nothing to your savings. To be specific, a score of 800+ is considered perfect. Because you probably wont save much money by getting higher.
Protect Your Credit Score From Fraud
Even if you have a Very Good credit score, you could still be at risk for identity theft. Criminals could hijack your credit history and take out loans in your name without you even knowing. To protect yourself, consider using credit monitoring and identity theft protection services that can detect unauthorized activity. These services can alert you before criminals can do any damage, and help you recover if your identity is stolen. Credit monitoring is also a great way to keep track of your credit score. If your score starts to slip, you’ll be alerted and can take action to improve it. With credit monitoring, you can also see your progress as you work toward a FICO® Score in the Exceptional range .
Benefits of improving your score to:
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Formulating A Plan To Improve Your 788 Credit Rating
First aid foremost, you need to understand that it takes time for you to build up your credit score. Dont expect it to be improved in the next week or the next month, even if you do everything necessary to improve it.
If you have any negative factors on your credit report right now, including a late payment, a bankruptcy, or an inquiry, you may want to pay the bills now and then wait. Remember that time is your ally, not your enemy. In the end, there is no quick fix for rebuilding a credit score. It takes time.
In formulating a plan to rebuild your credit rating, you need to understand how specific actions that you take will harm or hurt your credit score. For example, will working with your creditor to close an existing account in favor of rebuilding a new one with more favorable terms hurt or harm you?
Here are two factors for you to consider: a change to your credit report will affect your credit score , and your score is based entirely on the figures that are already in your report.
A major question that people have is how long it will take for them to improve their credit score. But heres what these people are missing: there isnt anything you can do to boost your actual score. Instead, you can do many things to rebuild your history of credit, and the healthier your credit history, the more elevated your credit score will be.
How Does Your Credit Score Compare
Most of the top credit rating agencies have five categories for credit scores: excellent, good, fair, poor and very poor. Each credit rating agency uses a different numerical scale to determine your credit score which means each CRA will give you a different credit score. However, youll probably fall into one category with all the agencies, since they all base their rating on your financial history.
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A fair, good or excellent Experian Credit Score
Experian is the largest CRA in the UK. Their scores range from 0-999. A credit score of 721-880 is considered fair. A score of 881-960 is considered good. A score of 961-999 is considered excellent .
A fair, good or excellent TransUnion Credit Score
TransUnion is the UKs second largest CRA, and has scores ranging from 0-710. A credit score of 566-603 is considered fair. A credit score of 604-627 is good. A score of 628-710 is considered excellent .
A fair, good or excellent Equifax Credit Score
Equifax scores range from 0-700. 380-419 is considered a fair score. A score of 420-465 is considered good. A score of 466-700 is considered excellent .
To get a peek at the other possible credit scores, you can go to ‘What is a bad credit score‘.
Also Check: What Is Considered A Good Credit Score
Credit Score Credit Card Options
With your score of 778, you should be approved for most credit cards. And since your credit score is relatively high, youll often get the cards with the best perks. This can include sign-up bonuses, no annual fees, travel programs, airport lounge or hotel perks and more.
Your score should secure you an average interest rate of 13.5 percent, while those with deep subprime credit scores will often have a rate above 20 percent.
Take Care Keeping Utilization Rate Low
It’s a good idea to keep your credit utilization rate below 30 percent. This means using less than 30% of your credit at any one time. If you go over this amount, it could give lenders the impression that your financial situation is unstable . However, people with the highest credit scores tend to keep their utilization rates much lower, often around 5%-10%. So if you’re aiming for a top score, it’s worth it to try and keep your usage rate low.
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How Your Credit Score Is Determined
All the leading credit rating agencies rely on similar criteria for deciding your credit score. Mostly, it comes down to your financial history how youve managed money and debt in the past. So if you take steps to improve your score with one agency, youre likely to see improvements right across the board.
Just remember that it may take some time for your credit report to be updated and those improvements to show up with a higher credit score. So the sooner you start, the sooner youll see a change. And the first step to improving your score is understanding how its determined.
Here are some of the factors that can harm your credit score:
- a history of late or missed payments
- going over your credit limit
- defaulting on credit agreements
- bankruptcies, insolvencies and County Court Judgements on your credit history
- making too many credit applications in a short space of time
- joint accounts with someone with a bad credit record
- frequently withdrawing cash from your credit card
- errors or fraudulent activity on your credit report thats not been detected
- not being on the electoral roll
- moving house too often.
What Is A Good Credit Score
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Different lenders have different criteria when it comes to granting credit
Its an age-old question we receive, and to answer it requires that we start with the basics: What is a credit score, anyway?
Generally speaking, a credit score is a three-digit number ranging from 300 to 850. Credit scores are calculated using information in your credit report, including your payment history the amount of debt you have and the length of your credit history.
There are many different scoring models, and some use other data in calculating credit scores. Credit scores are used by potential lenders and creditors, such as banks, credit card companies or car dealerships, as one factor when deciding whether to offer you credit, like a loan or credit card. Its one factor among many to help them determine how likely you are to pay back money they lend.
It’s important to remember that everyone’s financial and credit situation is different, and there’s no “magic number” that may guarantee better loan rates and terms.
Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair 670 to 739 are considered good 740 to 799 are considered very good and 800 and up are considered excellent. Higher credit scores mean you have demonstrated responsible credit behavior in the past, which may make potential lenders and creditors more confident when evaluating a request for credit.
What Factors Impact Your Credit Score?
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Keep On Going Your Very Good Credit History
Utilization rate on revolving credit: Your utilization rate is a measure of how close you are to maxing out your credit card accounts. You can calculate it for each credit card account by dividing the outstanding balance by the credit limit and multiplying by 100 to get a percentage. You can also figure out your total utilization rate by dividing the sum of all your credit card balances by the sum of all their credit limits . Most experts recommend keeping your utilization rates at or below 30% on individual accounts and all accounts in total to avoid lowering your credit scores. The closer any of these rates get to 100%, the more it will hurt your credit score. In fact, the utilization rate is responsible for nearly one-third of your credit score.
Late and missed payments play a big role. The presence of late or missed payments can have a significant negative impact on your credit score, accounting for more than one-third of the total score. If you want to improve your credit score, it’s important to get into the habit of paying your bills on time. This will help you avoid late or missed payments in the future and improve your creditworthiness in the eyes of lenders.
In 2017, 158 million Social Security numbers were exposed, which is an increase of more than 800% compared with the number from 2016.
How To Improve A 788 Credit Score
Its a good idea to grab a copy of your free credit report from each of the three major credit bureaus, Equifax, Experian, and TransUnion to see what is being reported about you. If you find any negative items, you may want to hire a credit repair company such as Lexington Law. They can help you dispute them and possibly have them removed.
Lexington Law specializes in removing negative items from your credit report. They have over 18 years of experience and have removed over 7 million negative items for their clients in 2020 alone.
They can help you with the following items:
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How To Improve Your Credit Score
Since your score still has some room for improvement, one of the following factors may be to blame:
- Derogatory marks: A derogatory mark on your credit report can have a major and long-lasting negative effect on your credit score.
- Insufficient: A thin credit file can bring down your credit score even if you dont have many derogatory marks. It could be that you havent used your credit enough to establish a positive enough payment history or that you dont have a good mix of different types of credit.
The good news is that you can recover from both situations. How long it will take to improve your credit score ultimately depends on your credit history and the decisions you make.
The steps below are a good place to start.
1. Get your credit reports and dispute any errors you find
Before you do anything else, go to AnnualCreditReport.com and request your credit reports from all three of the main credit bureaus in the US .
Make sure that your credit reports are accurate, and dispute any errors by mailing a dispute letter to the relevant credit bureau and your creditor. In particular, your credit report may contain any of the following types of errors:
- Late or missed payments that you actually made on time
- Accounts that arent yours
- Duplicate accounts
- Accounts with incorrect credit limits
- Accounts with incorrect open/close dates
You can now get your free credit reports once per week.
2. Dont overuse any one credit account
3. Pay off your outstanding balances
Is 804 A Good Credit Score
Your 804 FICO® Score falls in the range of scores, from 800 to 850, that is categorized as Exceptional. Your FICO® Score is well above the average credit score, and you are likely to receive easy approvals when applying for new credit. 21% of all consumers have FICO® Scores in the Exceptional range.
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Explore Your Refinancing Options
Now may be a good time to refinance your car loan or your mortgage. Doing so can save you money in the long term and potentially help your credit by making it easier to keep on top of future payments.
Although it is possible to refinance when you have bad credit, youll reap much greater rewards with a 788 credit score. For example, youll get better interest rates, which will save you money and may allow you to pay off the loan quicker.
Negotiating With Your Creditors
Despite what many people believe, your creditors are not your adversaries and they are not working against you. Therefore, you should not treat them as such. Instead, your creditors are working with you in an attempt for both of you to gain a profit.
If you fail to do things, such as pay your bills on time, it negatively impacts the ability of your creditor to do business with you. While they should be understanding of any reasonable financial hardships that youhave undergone in the past few weeks or months, they can tell the difference between short term financial problems that were out of your control and blatant financial responsibilities on your part.
Ultimately, its your responsibility to communicate effectively with your creditor so that you can both benefit equally from your business agreement.
For an example, if you are forced to skip on a payment or to default on an entire loan the very first thing you need to do is to contact your creditor and talk about the Issue in detail with them. This action alone will tell them that what has happened is out of your control and that you are trying to correct the Issue in contrast to them believing that you are just behaving irresponsibly. In addition, this will also strengthen your business relationship.
Examples of how your creditor may be willing to help you after you have discussed your problems with them include the following:
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Dont Apply For Every Credit Card
Too many credit inquiries in a short period of time can hurt your credit score. This can be difficult to avoid during Christmas when it seems that every department store is offering you a discount for signing up for its credit card.
Applying for new credit card accounts can account for 10% of your credit score, which isnt a huge number, but it can be enough to push you into the 800+ credit score club.
Holly Wolf, who with her husband has a credit score in the 800 range and is a chief marketing officer at Conestoga Bank, says she doesnt open a lot of credit cards and often closes cards she may have opened to get a store discount.
Honestly, this isnt a lifestyle to which most folks aspire, Wolf says. They need to have a nice car a big house and all the accouterments of prosperity over having a high credit score. Living debt-free or with as little debt as possible has enabled us to save for retirement, get the best rates on loans, and be prepared for unexpected expenses when they arise.