Is An 850 Credit Score Possible
Getting an 850 credit score is possible, but difficult. According to FICO, fewer than 2% of scorable Americans achieved a perfect score in 2019. 1
In practice, achieving the perfect 850 isnt necessary . Having a FICO score above 800 or a VantageScore above 781 lands you in the Exceptional or Excellent credit score bracket. With a score this high, you can easily qualify for the same benefits as someone with a perfect score, like optimal interest rates.
Percent Of Adults Who Never Check Their Scores
One study conducted by Javelin Strategy & Research and sponsored by TransUnion revealed that 54 percent of adults never check their credit scores8.
Checking your credit score is a crucial aspect of reaching your financial goals and correcting any mistakes in your credit report.
Whether you regularly use a credit card or are paying back loans like student loans, always check your score on a regular basis, whether its through a third-party application or using an established credit reporting company like Experian.
Why Your Credit Score Matters
There are real benefits to staying on top of your credit score.
Thats because a strong credit score can translate into real perks, like access to a wider range of products and services including loans, credit cards and mortgages. You could also enjoy better interest rates and more generous credit limits. Meanwhile, if your credit score isnt quite where you want it to be, knowing the score is the first step to improving it.
Either way, it pays to know your credit score. Its your financial footprint the way companies decide how financially reliable you are. A higher credit score means lenders see you as lower risk.
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Age Of Credit History
Next down the line in terms of credit score importance is the age of your credit history, which accounts for roughly 15% of the points in your scores. Neither FICO nor VantageScore considers your actual age thanks in part to restrictions set forth in the Equal Credit Opportunity Act or ECOA, but the age of the accounts on your credit reports does matter.
In terms of credit scoring, the older the accounts on your credit reports, the better. If you have a young credit report you wont be able to earn an 850 score until the accounts become more seasoned.
Additionally, opening new accounts too frequently can stall your quest for the perfect 850 score as both FICO and VantageScore consider the average age of the accounts on your reports. Every time you open a new account, the average age of your accounts goes down.
What Is Your Credit Score Why Is It Important
Your credit score may be defined as a rating that reflects your creditworthiness. Think of your as a batting average. If your batting average is above 50, then it means that you have a consistent scoring record of 50, and you are a good player. Similarly, when your credit score is high, it shows that you have borrowed and repaid credit responsibly in the past.
Your credit score is important because it showcases how dependable or risky you are as a borrower. Thus, it directly impacts how eligible you are for a loan, what the lender will offer you as a loan amount, and the rate of interest you will be charged. Your credit score allows lenders to judge the potential risk in lending you money. Your credit score is critical when it comes to unsecured or collateral-free loans and can affect your eligibility for personal loans to a great extent.
While you as an individual have a score, even businesses are given credit scores. For a business, the CIBIL score impacts how creditworthy a lender will find the company. A business credit score could also impact its ability to attract investment.
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Is 810 A Good Credit Score
Your 810 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.
How To Maintain The Best Credit Score
has tools and resources that can work with you like a credit partner to assist in maintaining your best credit score. For example, you can check your credit score and monitor account activity whenever it suits you. Credit Journey also offers free , which can help you keep up with your credit standing. Thanks to these handy tools in your mobile device, you can see a clear picture of your credit no matter where you are in the world. These resources can keep you in touch with your accounts even when your busy life takes precedence.
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Average Credit Score By Income
According to American Express, the average credit score by income are as follows4:
- $30,000 or less per year: 590
- $30,001 to $49,999: 643
- $50,000 to $74,999: 737
The correlation between lower average credit scores and lower-income may be associated with factors like higher-income individuals being able to pay back credit card debts more easily as well as being able to maintain a lower credit utilization ratio.
Those with higher income may also have higher credit limits in comparison to those with lower income.
That being said, income is not the most accurate measurement of scores. Income is only one factor that plays a role in your score. You can still have a low income and have good credit. If you fall into a lower income bracket, dont worry. Your income doesnt determine your score.
What Is The Best Credit Score Possible
The FICO rating model enables buyers to have a credit score as high as 850. Do individuals really have this score, is it possible? While its possible, its not normal. That is the reason moneylenders regularly consider any FICO assessment more than 720 as excellent, giving them the best terms on their ideal loan.
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What Is The Best Credit Score You Can Get
The best credit score that you can get is 850. But its neither easy to reach to this pinnacle of the , nor always possible. Less than 1% of people have the best credit score possible. And even if you manage your finances perfectly, you still may not achieve it. Fortunately, its not something you need to strive for, either.
Everyone with a credit score of 800+ actually has perfect credit. Thats because a score of 800 or better is generally all you need to get the best possible credit cards, loans, insurance premiums, etc. In other words, a higher score wont save you more money once you join the 800+ club.
Below, you can learn more about the best credit score, including what it takes to earn it and what it gets you.
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.
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‘.
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Learn About The Highest Credit Score And Just How Perfect Your Credit Score Needs To Be
If youâve ever wondered what the highest credit score you can have is, itâs 850. Thatâs at the top end of the most common FICOÂ® and VantageScoreÂ® credit scores. And these two companies provide some of the most popular in America.
But do you need a perfect credit score? Not necessarily. According to credit bureau ExperianÂ®âs research, a score above 760 could qualify you for the best interest rates.
What Is A Good Credit Score According To Lenders
Lenders, such as credit card issuers and mortgage providers, may set their own standards on what “good credit” means as they decide whether to grant you credit and at what interest rate.
In practice, though, a good credit score is the one that helps you get what you need or want, whether that’s access to new credit in a pinch or lower mortgage rates.
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Key Characteristics Of Consumers With The Highest Credit Score
Although theres no defined formula for a perfect credit score, heres what the highest credit score consumers have in common:
- Long credit histories. Most people with perfect credit scores have a long credit history. According to a 2019 FICO report, their average oldest credit account was 30 years.
- Perfect payment history. A person who has perfect credit typically has a perfect payment history. This means they have no collections, late payments or other negative information listed on their credit reports.
- Low credit utilization ratio. The majority of people with scores of 850 dont use much of their available credit. According to the same FICO report, their average credit utilization ratio was 4.1%.
- A low number of recent credit inquiries. Although some open new credit accounts, the majority of them dont. When you apply for a new account, it typically requires a hard credit inquiry, which can damage your score between one and five points.
How To Get A Loan Despite A Poor Credit Score
- Borrow from non-banks:While non-banking financial companies, like Bajaj Finserv, still need you to have a decent credit score, they tend to have relatively simpler eligibility criteria, which may help you raise funds fast and without too much effort.
- Apply with a guarantor or co-signer to your loan account:Adding a co-borrower to your loan application helps distribute the responsibility of repayment between you and the co-borrower. When your co-borrower has a good score, you will be able to borrow a larger loan amount and boost your chances of approval too.
- Try to find a secured loan:When a loan is unsecured, the lender is more stringent with the eligibility criteria by carefully filtering and selecting the most reliable borrowers. However, if you have collateral to offer, the significance of having a good credit score diminishes.
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How To Aim For The Highest Credit Score Possible
If you really, really want to fight for every possible point, we have some strategies that can help:
Pay every bill on time, every time. Payment history is the biggest factor in your score, so a misstep there can really set you back.
Keep your credit balances well under 10% of your credit limits. Credit utilization the amount of your credit limits in use is another highly influential factor in your score. The lower you can get it, the better.
Have multiple credit accounts, and installment loans as well as .
If your credit history is on the short side, ask to be an on an old, established credit card with a spotless payment record and low credit utilization.
Check your credit reports to spot errors that could hold down your scores.
Apply for new credit only if you really need it.
Make Sure There Are No Negative Marks On Your Credit Report
Even if youve never missed a payment, there could be illegitimate negative marks on your credit reports. Be sure to check your Transunion and Equifax credit reports for free from Credit Karma and make sure there are no errors.
If you find incorrect marks on your reports, you can dispute them. Upon receiving a dispute, the credit-reporting companies are required to investigate and fix errors in a timely manner.
Even if you have legitimate negative marks on your credit reports, they will affect your scores less over time and should eventually fall off your reports completely.
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Length Of Your Credit History
After your credit utilization ratio, the length of your credit history impacts your credit rating the most. It accounts for 15 percent of your FICO score.
When calculating this factor, FICO considers:
- How long your credit accounts have been established, including the age of your oldest account.
- The average age of your accounts.
- How long specific accounts, such as revolving credit, auto loans, etc., have been active, and how long it has been since certain accounts have been used.
The Effect Of New Credit
Applying for new credit accounts has a lesser impact on your credit, but its still something to keep track of. It accounts for 10 percent of your FICO score.
From FICOs viewpoint, applying for several accounts in a short time period increases credit risk and negatively impacts your credit.
However, sometimes consumers apply for multiple loans when shopping for the best rate. FICO recognizes this. For this reason, FICO calculates multiple applications for mortgages, auto loans or student loans made within 45 days of each other as one application.
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Keep Your Credit Balances Below 30 Percent
Credit reporting agencies look at the ratio of credit used compared to the amount that is available to you. It’s a good idea to keep your credit low, or below 30 percent of your available credit. You may be able to do so by paying off your balances, increasing your credit limit, decreasing spending and opening a new line of credit.
Advantages Of Having A High Credit Score
Your credit scores from FICO, VantageScore and other credit-scoring companies are based on information in your . So a high score is a sign of healthy credit. And thatâs good news to lenders. It can be a sign that youâre likely to use credit responsibly. With a high credit score, you might:
- Pay lower insurance premiums. Some insurance companies use your credit reports to help them decide whether to approve insurance applications and how much to charge in premiums.
- Qualify for lower interest. According to the Consumer Financial Protection Bureau , lenders typically offer the lowest interest rates to those with the highest credit scores.
- Get approved for a higher amount. You may be able to get a higher limit on your credit card or a bigger loan.
- Have more housing choices. Higher credit could make it easier to rent an apartment or get a mortgage.
- Find it easier to get utility services. According to the Federal Trade Commission, the better your credit history, the easier itâll be to get utility services.
- Have an easier time getting a cell phone. With good credit, you may be less likely to have to prepay or put down a security deposit when opening a cell phone account.
- Look better to potential employers. Some companies might look at your credit reports as part of their background checks.
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What Is A Good Credit Score Range
Good credit score = 680 739: Credit scores around 700 are considered the threshold to good credit. Lenders are comfortable with this FICO score range, and the decision to extend credit is much easier. Borrowers in this range will almost always be approved for a loan and will be offered lower interest rates. If you have a 680 credit score and its moving up, youre definitely on the right track.
According to FICO, the median credit score in the U.S. is in this range, at 723. Borrowers with this good credit score are only delinquent 5% of the time.
The Main Factors That Affect Your Scores: Fico Vs Vantagescore
While VantageScore and FICO scoring models have differences, both make it clear that some factors are more influential than others.
For both models, payment history is the most important factor, followed by the total amount of credit you owe .
FICO uses percentages to indicate the importance of each factor to your credit scores.
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Is Aiming For A Perfect Score Worth It
Reaching a perfect 850 credit is certainly an achievement, as very few people find themselves in this territory. But working toward a perfect credit score wont necessarily give you more of an edge when it comes to getting approved for loans or getting the best interest rates if you had an 800 score instead.
With that in mind, its helpful to work on improving your score as much as possible, particularly if you plan to borrow money to fund your business. If your credit score isnt as high as youd like it to be yet, here are some of the smartest things you can do to get it on the right track:
- Pay your bills on time. Payment history accounts for the largest share of your personal credit score, so get in the habit of paying on time. Setting up automatic payments for your personal and business expenses can make this easier.
- Reduce your debt. Carrying high balances on your credit cards can work against your score. Prioritize paying down some of what you owe, aiming to use 30% or less of your total credit limit.
- Limit new inquiries for credit. Applying for new credit cards or loans can knock a few points off your score each time. Stick with applying for new credit only when its absolutely necessary.
These seemingly simple measures can go a long way toward helping you boost your credit score.
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