Ways to Get to a Perfect Credit Score
Most consumers pay attention to their bills but not their creditworthiness. Each credit bureau uses different information on their reports to determine how creditworthy someone is. Your careful use and monitoring of your credit will be instrumental in how your creditworthiness is perceived, and the higher the score, the better. Still, it is possible to get a perfect credit score? Learn how to plan and implement the means for achieving an excellent score below.
Is It Possible to Get a Perfect Credit Score?
Yes, but it requires a lot of effort and attention on your part. I know this because I have a perfect credit score. As of this writing, below is my latest score…
Here is the information I learned and the methods I used to reach this achievement.
Credit companies take into account specific information to determine what affects your potential score. Some of that information is as follows:
- Credit limits
- Types and number of credit accounts
- History of payments
- Length of credit history
- Collections accounts
- Hard and soft inquiries
How to Perfect Your Credit Score and Get to 850 Credit
Among other things, lenders investigate how you manage types of debt. Here are some factors that can play a part in how to manage credit and bring your score up.
A Mix of Credit
There’s a reason why credit card companies look at your utility bills, among other things, to determine creditworthiness. It helps them see how you manage all kinds of debt. When lenders look to make a decision about your trustworthiness, they base it on everything from regular rent or mortgage payments to any store cards you use. Bankruptcies demonstrate an inability to manage finances. Managing credit responsibly shows you can handle your finances.
The average credit card balance is over $6,000. Unfortunately, this puts a lot of consumers over their heads in debt. You must learn to use a card wisely. Do not use credit cards to fund your life. It can be easy to use cards to buy groceries, gas, and other daily essentials. Ultimately, though, this pattern drives your credit debt up when you want to drive it down.
Nothing impresses lenders more than how much you impress other lenders. Someone with a half-dozen well-managed credit accounts is going to look far more trustworthy than a consumer working with one unmanaged account. The average credit card limit in this country is currently almost $23,000. This and anything higher can put you in good standing if you’re not mismanaging payments.
Debt Utilization Rate
Debt Utilization Rate is a percentage of total credit that will be used on any credit report. The rate should be kept below 30%. The best way to do that is by keeping low balances in relation to your credit limit.
FICO lists payment history as a major factor regarding credit scores. Paying your bills on time is one of the best things you can do to establish your creditworthiness.
Length of credit history is important to a perfect FICO score. Lenders view solid, long-term management as a sign of creditworthiness.
Hard and Soft Inquiries
If your credit report gets pulled from Equifax, TransUnion or Experian, your credit score can be affected. A hard inquiry takes place after you apply for things like loans or credit cards. A soft inquiry has no score impact. Soft pulls require a company to ask about your creditworthiness. This is common for a preapproval. The fewer hard pulls, the greater the chance to grow a perfect FICO score.
What Is a Perfect Credit Score?
A perfect credit score is 850. It’s quite an achievement to reach this score. Only 1.6% of the US population has a perfect score; however, anything over 800 is still excellent.
Here is a list of FICO’s credit score ranges:
- Exceptional: 800-850
- Very Good: 740-799
- Good: 670-739
- Fair: 580-669
- Poor: Under 580
How to Maintain Perfect Credit
There’s no tried-and-true formula for how to perfect your credit score and get to 850 credit. However, there are steps that can help. The hardest part will be vigilance. All these guidelines seem simple, but it’s the consumer who can’t adhere to them that ends up in the deep end of credit waters.
- Pay your debts on time, every time: This requires budgeting. Avoid spending more than you can pay off regularly. Set up electronic reminders and automatic payments so that a date is never missed. If you miss a payment, contact your debtor immediately and arrange to fix the issue. Getting and staying current is everything. I was meticulous about this.
- Avoid getting too close to credit limits: Credit score models take into account your maxing out. The credit companies will know when and how often you hit credit ceilings.
- Use smart management: Handled properly, free balance transfers can stretch funds over time without hurting your credit. I did this as a full-time college student working part-time and earning less than $5,000 annually. I made sure my cards were paid on time.
- Long credit histories help answer the question, “Can you earn a perfect credit score?”: The perfect credit score is based on experience in the long term. The more responsible your credit experience, the more likely a lender will trust you with their money.
- Apply only for credit that’s needed: Formulas that calculate credit scores can look at recent activity as an omen. Needing credit is seen as a bad sign. Applying multiple times for credit over short periods of time has a negative impact. It leaves lenders to believe you’re in the negative, and you’re desperate for funding.
- Keep track of your credit reports: This will be all-important as it helps you determine what you need to do. Errors do happen, and you should dispute them. Old credit accounts that you don’t use can be stolen. The activity will show up on your reports. Notify the credit companies immediately if you see any discrepancies on your reports.
- Be careful with new cards: It’s not uncommon to get a shiny, new card and hit the stores immediately. Do this with caution, especially during the early period where the credit card companies entice you with offers of zero percent rates. This is a trap that can land you in debt. During the zero percent incentive, don’t spend more than you can pay off. Remember, your goal is to drive credit card debt down, not up.
Last Word on the Perfect Credit Score
Take note that anyone in the FICO score range of 800 to 850 will very likely be eligible for all the same perks. The means the best rates on auto loans, mortgages, credit cards, and other financial products.
Knowing how to maintain perfect credit and staying on top of it won’t be easy, but it’s not impossible. If you’re new to credit or you find yourself struggling to get on your feet, a good service can advise and help you tailor your habits. This counsel will establish and help you build credit until you close in on that perfect FICO score.
A company like Vetted Opps provides access to everything from tools and advice to opportunities for turning your financial life around. We can answer your question “Is it possible to get a perfect credit score?” Contact us to learn about those opportunities to get on your way to perfect credit.