The FICO credit score model allows consumers to have a credit score as high as 850. Do people actually have this score? While it’s achievable, it’s not all that common. That’s why lenders often consider any credit score over 720 as ‘excellent,’ giving them the most favorable terms on their desired loan.
How to Get the Best Possible Credit Score
So how do you go about achieving a credit score as high as 850 or close to it?
It all comes down to your financial habits. It probably goes without saying that you have to pay your bills on time. Even one late payment can drag your score down significantly. It’s also important for you to pay your balances down as much as you can. In a perfect world, you should pay the balances off completely. Because this isn’t always possible, you should at least make an attempt to get the balances as low as you can with a zero balance being your ultimate goal.
You also have to be vigilant about checking your credit report for errors. They happen more than you might think. Whether it’s a negative account that the credit bureau never removed even after resolution or it was reported by mistake, it affects your credit score. The more you check your credit history, the higher your chances of it being accurate, allowing you to achieve that high credit score.
Finally, you need a long credit history. Don’t expect to achieve the illustrious 850 credit score after just a few years of having trade lines. It can take between 20 and 30 years of establishing a good credit history to hit a score of 850. That doesn’t mean you won’t hit ‘excellent credit scores,’ because that’s possible. It’s the score of 850 that requires the longest credit history possible.
Maintaining Good Credit
Rather than trying to achieve the credit score of 850, you should focus your efforts on maintaining good credit. This requires good financial habits, similar to what was stated above, with a few exceptions.
- Pay your bills on time. You won’t have good credit if you can’t pay your bills on time. Lenders rely on your credit history to see your patterns for paying your bills. If you pay them late, you may be considered ‘high risk.’
- Pay your balances down. Don’t carry high balances. Credit utilization is a big part of your credit score. The higher your balances, the higher your utilization rate becomes, which means the lower your credit score falls.
- Watch your inquiries. Every time you apply for new credit, you get hit for an inquiry. While it’s usually only 5 points, they can definitely add up if you aren’t careful.
- Check your credit. Every consumer should check their credit reports at least 3 times a year. You can receive a free copy from each of the three bureaus on an annual basis
Overall, you should strive to achieve decent credit all of the time. Be a model consumer by paying your bills on time and not charging what you can’t afford to pay off right away. These habits alone will help your credit score remain healthy. If you do find that you slip up, don’t worry. That’s the beauty of credit scores; they are easily fixed as long as you put in the effort.