Author: Heather Vale
February 13, 2023
Most people will never get the highest possible credit score, but some do manage to attain what seems unattainable. More importantly, you can increase your credit score no matter where you currently fall on the scale.
When you find out your credit score, and see it rising and falling for seemingly random reasons, it’s natural to be curious about where you fit in the grand scheme of things. And if you’re competitive, you might set out to snag the highest of high scores … even a perfect score, if you can get it.
Well, you can get it, but it’s extremely rare and difficult. There are a lot of factors that go into your credit scores, and it takes hard work and consistent habits to get to the top of the heap. But if you really want to, you might be able to pull it off.
You actually have more than one credit score, because there are two companies with credit scoring models—FICO® and VantageScore®. Each of them has slightly different ranges, but both go from 300 to 850.
As far as what makes a good credit score, that’s slightly different between the two models as well. FICO calls its ranges Poor, Fair, Good, Very Good and Exceptional while VantageScore names them Very Poor, Poor, Fair, Good and Excellent. Very Poor and Poor, in VantageScore lingo, ranges from 300 to 500. For FICO, Poor is 300 to 579. VantageScore’s Excellent is 781 or above while FICO’s Exceptional is 800+.
Since both FICO and VantageScore range from 300 to 850 on their standard base scales, 850 is a perfect score and as high as you can get. However, “perfect” is hard to attain no matter what we’re talking about, so 800 and above is considered excellent—or “Exceptional,” to borrow FICO’s language.
Does anyone have a perfect credit score? Sure, but it’s just over 1% of the population, according to credit bureau Experian. People with perfect scores tend to have more lines of credit but use less of it. And none of their accounts are delinquent because they pay on time, every time, even when carrying a balance.
Over 73% of people with a perfect credit score are close to 60 years old, or older. That makes sense when you consider the length of their credit history, and the fact that they’ve had a much longer time to build and establish good habits.
If you plan to borrow money through a loan or credit card, having a high credit score will make your life a lot easier. A higher credit score generally means higher credit limits and lower rates, so you can borrow more by paying less. Just don’t overextend yourself to the point where you’re carrying a lot of balances.
In addition, your credit utilization ratio (CUR) will be lower if you have more unused credit, and that in turn can boost your credit score even higher. Ironically enough, creditors and lenders want to give you more credit (and a higher score) when you show that you don’t use it and don’t need it.
You’ll likely get similar terms and credit lines with a score of 760 or better as you will with a score that’s 800+. And many financial experts point to the 760 credit score as ideal because it allows you to qualify for the lowest rates while still being attainable.
However, whether you’re trying to get a score of 760, 800 or 850, the process is still the same. And yes, getting a score of 800 or above is doable with some good habits and consistent diligence.
This phrase can start to sound like a broken record, but on-time payment really is crucial when it comes to raising your credit score. In fact, it’s the best and most important thing you can do—while late or missed payments are the worst. Your payment history makes up 35% of your FICO Score.
While many people will say there’s no magic number for credit utilization ratio, you’ll also hear “less than 30%” a lot. So that really is the magic number. The second magic number you’ll hear is “9% or less,” and if you can keep your CUR in the single digits you’ll almost definitely come out ahead. Your CUR accounts for 30% of your credit score, so this is more powerful than you might think.
Having more available credit and a lower CUR is good, but applying for too many cards is bad. This is a red flag that creditors see as desperation, and each application is a hard pull on your credit report that could negatively impact your score. While you’re building credit, applying for one or two cards a year is more than enough.
A perfect all-round credit score, and the highest you can get, is 850. Very few people actually achieve this—in fact, we could call it “the other 1%” and it’s just as elusive as being among the top 1% of wealthiest people in the country. And yet, striving for a better credit score is always beneficial.
If you’re looking for a new credit card to help you on that journey, see if you pre-qualify for a Credit One Bank offering, which doesn’t affect your score.
About the author:Heather Vale
For over a quarter of a century, Heather has been working as a journalist in all media: TV, radio, print, and online. After establishing her career in Toronto, she has been living, working, and playing in Las Vegas for the past decade. She loves pulling apart complicated topics to make them simple, fun, and easy to understand, especially in the business and financial niches. But she also enjoys writing about the personal side of life, including success, relationships, families, and pets. She approaches everything from a yin-yang perspective, so her passion for wordplay and entertaining metaphors is always balanced with an intense (and some would say annoying) focus on facts and accuracy.
This material is for informational purposes only and is not intended to replace the advice of a qualified tax advisor, attorney or financial advisor. Readers should consult with their own tax advisor, attorney or financial advisor with regard to their personal situations.
The scariest part of change can be the unknown. But sometimes the known, as in continuing with the same behaviors that aren’t achieving the desired results, can be even scarier. Take your credit. If a good credit score is important to you but seems to consistently elude you, it may be time to alter or abandon some of the habits and behaviors keeping it at bay and adopt new ones.
So you’re looking to increase your credit score—preferably sooner rather than later.