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.
| FICO |
|---|
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Less influential |
Introduction To Understanding The Highest Credit Score Possible
Lets back up for a minute. Notice that we mentioned anything over 740 is generally considered to be great? Thats because credit scores are generally broken into the ranges poor, fair, good, very good, and excellent. The chart below outlines these various credit score ranges. As you can see, Excellent is generally defined as anything above 800 and 850, while a Good credit score is considered anything between 670 and 739.
FICO Credit Score Ranges
| 580 & below |
Well dive into more detail on ways to achieve the highest credit score later in this article, but for now lets look at why its important to have an understanding of the highest credit score and how it can impact you.
Why Having A Good Credit Score Still Matters And How To Check Yours For Free
It’s OK if you haven’t yet reached a 760 credit score. The national average FICO score has steadily risen over the years and hit a record high of 703 in 2019, so many are in the same boat. The good news is that, whether you have a good credit score or even an excellent one, you will most likely qualify for some of the best cards and even cards with the best rewards.;
The American Express® Gold Card was voted CNBC Select’s best overall rewards card for giving cardholders 4X points per dollar spent at restaurants and at U.S. supermarkets . Plus, the option to earn 3X points on flights booked directly with airlines or on Amextravel.com. Applicants can qualify with good or excellent credit.
And the Blue Cash Preferred® Card from American Express ranked as the best rewards credit card for groceries, as cardholders earn 6% cash back at U.S. supermarkets on up to $6,000 per year in purchases . This card also offers 6% cash back on select U.S. streaming subscriptions, 3% cash back at U.S. gas stations, 3% cash back on transit and 1% cash back on other purchases. Applicants can qualify with good or excellent credit.
To track your own credit progress, make sure you routinely check your credit score. It’s smart to monitor your credit, and your score will not be affected by doing so . You can check your score for freewith most card issuers, using apps such as Discover’s Credit Scorecard and Chase’s Credit Journey, which are available to all card users.
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How Can I Get A Perfect Credit Score
While not many people achieve a perfect score, its possible to get an 850. And getting your credit score to the highest credit score possible starts by having a clear understanding of what a credit score is and how its calculated. Another key factor is patience.
The amount of time it takes to get to 850 can seem long, especially if youre starting from the lower end of the credit score range. But, if you focus on the key credit score factors, you may be able to claim the highest given score. However, its important to note that its normal for credit scores to fluctuate with each billing cycle based on your activity. While you may reach 850 one month, its possible for your score to go down a bit the next month and then go back up again.
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.
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Is A Perfect Credit Score Worth It
Whether or not a perfect credit score is worth the effort depends on what you hope to get out of your credit history. For a lot of people, having very good or excellent credit will be good enough; you still get nearly all of the benefits of perfect credit, including the ability to access .
Some people may still want to push themselves toward that exceptional 800-850 credit score range. If youre the kind of person who likes a credit score challenge, trying to get your credit utilization low enough to boost your credit score over 800 could be a fun gameand if youre about to apply for a mortgage or another major loan, shifting your credit score from excellent to perfect could save you some money.
However, dont spend too much energy trying to earn an 850 credit score. At that point, youre putting in more effort than youll get back because once youre north of 800 there arent any additional benefits to getting your score higher.
Getting The Highest Credit Score Possible
When youre familiar with what the highest credit score is, how to achieve it, and how to maintain it, youre putting yourself in a better financial situation. Your credit score impacts your ability to make big purchases like a home or car, and it also impacts smaller things like whether or not you have to put a deposit down when applying for utilities or a cell phone.
While getting a perfect score of 850 may be a long shot, getting a score in the Good or Excellent range is certainly attainable and, if you follow some of the steps outlined in this article, youll be well on your way to financial freedom.
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How To Get A Perfect Credit Score
Want to know how to get a perfect credit score? Start by building good creditwhich you can do by making all of your on time and keeping your below 30 percent. Once you have established good or excellent credit, you can start taking the extra steps that may, with time, help you achieve perfect credit.
Benefits Of A Perfect Credit Score
The benefits of a perfect credit score are more or less the same benefits you get from having excellent credit. When you have a perfect credit score, you become eligible for nearly all of todays best credit cards, including premium credit cards like the Chase Sapphire Reserve®, the Citi Prestige® Card and The Platinum Card® from American Express. Your credit card application could still get declined if you fall on the wrong side of something like the Chase 5/24 rule , but in most cases lenders will be eager to loan you money.
Plus, your perfect credit should score you some of the best interest rates on the marketwhether youre applying for a , shopping for a car loan or taking out a mortgage. In fact, if you took out your mortgage before you earned your perfect credit score, you might be able to save a lot of money by refinancing your mortgage and lowering your interest rates.
Having a perfect credit score can also make it easier to rent an apartment since landlords often perform a credit check after you turn in your application. Perfect credit might even help you during a job search if your employer checks your credit history during the interview process.
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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.
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Average Credit Score In America: 2021 Report
By:;Christy Bieber | April 20, 2021
Many or all of the products here are from our partners. We may earn a commission from offers on this page. Its how we make money. But our editorial integrity ensures our experts opinions arent influenced by compensation. Terms may apply to offers listed on this page.
Amidst bad economic news in 2020, there was a bright spot. Consumer credit scores increased by leaps and bounds thanks to a reduction in late payments and an aggressive effort to reduce credit card debt.
With reduced consumer spending, thousands of dollars in government stimulus funds, and smart tactics like loan consolidation and balance transfer cards, many people got a better handle on their debt.
But there may be change afoot for credit scores, too — President Joe Biden has expressed interest in a public credit reporting agency that would take the place of credit bureaus like Experian, TransUnion, and Equifax. That would cause a huge shift in how we keep track of creditworthiness.
Until that happens, though, we’ll continue to use systems like the FICO® Score. Let’s take a look at how the average American’s credit looks in 2021.
The Importance Of Credit Categories Varies By Person
Your FICO Scores are unique, just like you. They are calculated based on the five categories referenced above, but for some people, the importance of these categories can be different. For example, scores for people who have not been using credit long will be calculated differently than those with a longer credit history.
In addition, as the information in your credit report changes, so does the evaluation of these factors in determining your FICO Scores.
Your credit report and FICO Scores evolve frequently. Because of this, it’s not possible to measure the exact impact of a single factor in how your FICO Score is calculated without looking at your entire report. Even the levels of importance shown in the FICO Scores chart above are for the general population and may be different for different credit profiles.
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Who Creates Your Credit Report And Credit Score
There are two main credit bureaus in Canada:
- Equifax
These are private companies that collect, store and share information about how you use credit.
Equifax and TransUnion only collect information from creditors about your financial experiences in Canada.
Some financial institutions may be willing to recognize a credit history outside Canada if you ask them. This may involve extra steps. For example, you may request a copy of your credit report in the other country and meet with your local branch officer.
Here’s What Americans’ Fico Scores Look Like
by The Ascent Staff | July 29, 2020
Many or all of the products here are from our partners. We may earn a commission from offers on this page. Its how we make money. But our editorial integrity ensures our experts opinions arent influenced by compensation. Terms may apply to offers listed on this page.
The average American has a FICO credit score of 706. But unless your credit score is exactly 706, this doesn’t tell you much about where you stand. Wondering how you compare with other American consumers? Here’s a look at the current distribution of FICO scores, and some guidelines that can help you interpret what your score means.
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Other Derogatory Factors Which Negatively Affect Your Credit Rating And The Credit Bureaus Dont Like To Mention To You Are:
Length Of Credit History
In general, having a longer credit history is positive for your FICO Scores, but is not required for a good credit score.
Your FICO Scores take into account:
- How long your credit accounts have been established, including the age of your oldest account, the age of your newest account and an average age of all your accounts
- How long specific credit accounts have been established
- How long it has been since you used certain accounts
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They Got Their Financial Act Together Early
It takes time and financial discipline to have a top-notch credit score.
“Building credit doesn’t happen overnight,” said Heather Battison, vice president at TransUnion. “Create your own financial management process and make sure credit management is part of that process.”
People with high credit scores usually got on the right financial track as soon as they entered the real world: meaning they created a budget, were mindful of their spending and got in the habit of always paying their bills on time.
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Whats The Range For Fico Scores
Your FICO®;Score will be a three-digit number, ranging from 300 to 800+.
But most lenders arent looking for one specific number, but rather an overall feeling for how you handle credit. Therefore they group them so you can look at the scale and see where you fall. While aiming for the top is important, you are likely still able to get credit with a very good score, while some lenders might even dip down into the good designation. Here is how they group the scores on a scale:
- Exceptional:;800+
Fixing Your Fico Score
If your FICO score is not as high as you would like it, there are things you can do to improve it. First of all, be sure to keep all of your bills current and in good standing. Always pay your bills when they come due, never make late payments, and pay more than the minimum balance on your or pay them off completely if you can. The longer you have a good payment history, the higher your will be.
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Credit Score: Is It Possible To Get
Adam McCann, Financial WriterMar 26, 2021
The most popular credit scores all use a range of 300 to 850. So a credit score of 900 isnt possible with those models, which include VantageScore 3.0 and 4.0 as well as FICO 8 and 9. But some older models, as well as some alternative scores, do go up to 900 . Its good to be familiar with these ratings, but you probably wont encounter them often.
So you should worry far more about where you stand on the standard credit score range. And you can see exactly where that is by checking your latest credit score for free on WalletHub.
Below, you can learn more about credit scores with unusually high ranges as well as which number you should really target on the standard credit score range.