How To Get Your Credit Score Above 800
Taking a proactive stance towards earning the highest credit score possible is the quickest way to reduce your monthly interest payments and in turn, save more for retirement. Learning how to get 850 credit score will not only make you more competitive financially but instill you with the knowledge to help others as well. Our 12 entertainers will not only show you what is an excellent credit score, but what it takes to achieve one without having a large income.
An 800+ FICO credit is considered exceptional and in the perfect credit score range. Borrowers with this credit score receive the outstanding terms on credit cards and loans and best interest rates. A high credit score can save thousands of dollars over the lifetime. Achieving this credit score requires consists financial behaviors and established money habits. A good credit score is a record of solid lengthy credit history.First of all, it is import to always pay on time. Payment history is paramount to the credit score and accounts for 35% of the total. Another important factor to watch his credit card balance in relation to credit limits. The ideal borrower keeps this ration at 10 percent. Bank want borrowers who do not abuse the credit funds and borrow modestly.
This kind of behaviors demonstrates banks that customer is unlikely to max out credit cards in the future. Similarly, the ideal borrower should not apply for new credit too often. Multiple requests over the short period of time raise suspicion and can damage the credit score. This indicator accounts for another 10 percent of the score.Good credit score usually implies a diversified credit portfolio that includes credit cards, mortgage, auto loans and student loans. Credit reporting agenciesvalue the ability to maintain and manage various types of accounts.However, regardless of the diversity of the portfolio, the key factors values by all credit score models are length and consistency. Those who break into 800s have a history of accounts that have been open for decades. A credit score is your reputation, it takes years to earn it and only a day to lose it.
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First of all, 800+ is rare. Most consider A+ credit to be over 750 and in mortgages around 720, so 800 doesn’t do anything extra for you other than maybe a thing of pride.
I have pulled thousands of credit reports in my 18-year career and I have literally never seen an over 800 score with a lot of debt. They typically have minimal long-term debt like one aged mortgage and a couple credit cards or one aged car or education loan and a couple credit cards. Most of the time they have pages of paid or closed positive accounts. When I do see past lates, they are years ago and they have re-established credit again and it’s all positive for years. They don’t have any serious marks against their credit like judgments, bankruptcy, or even collections.
Another thing that I have noted is that over 800 credit scores seem averse to debt or at least do not seem to take on new debts easily. For example, they do not open new accounts to get 10% off. They do not look for new debts unless they have a plan to pay it off (like credit cards) or pay it faster than the allotted time (like car loans or education loans or even mortgages). This is not to say that this directly impacts their score, but perhaps it is the mindset to get and keep a high score.
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A credit score of 800+ requires a few components: (1) obviously, no negative factors (like missed payments) and as few hard pulls (inquiries) as possible, (2) 3-4 revolving credit lines (credit cards); each should have as high a credit limit as you can get (call the bank each year and ask for an increase) and a small utilization (single digits), (3) an installment loan or two (mortgage, car loan, personal loan); they like to see a mix of credit types used.
For the revolving lines, you don’t want too few or too many. 3-4 is ideal. Don’t have store credit cards (like Macy’s, Target, etc) because those have really low limits ($500 or maybe $1000). You want 3-4 cards with $25K+ credit limits on each. Then, you want to only use $1000 or so of the available limit. Keep your utilization down around 5% or less for each line.
For the installment loans, a mortgage is good but it’s not enough. You also need a car loan or a personal loan. You can get a $10K personal loan that you pay back in 6 months or so, just so you have it on your credit report. It’ll probably stay there for 7 years after your last payment before it ages off.
In addition, it’s good if the average age of your credit lines is long. Don’t get a new credit card every 12 months just for the signup bonus. That will cause your average age to go down. You want 10+ years as the average age. Don’t close your oldest account (even if it’s got a small limit) because it’s helping to pull up your average age.
Thirty-five (35%) percent of your credit score is based upon on-time payments. Therefore, to ensure that you have money to pay your bills in a timely fashion, your first step in establishing credit is to prepare a budget. A budget is the foundation of financial wellness. You cannot be assured that you will pay your bills without a spending plan. A budget is like a GPS. Just like a GPS tell you where to go, a budget directs your money. Be sure to write down all of your expenses. You’ll need an accounting of all monies. Once you’ve allocated money for your bills, and trimmed the fat, there should be enough money to pay your bills in a timely manner. If not, consider other ways that you can earn
extra income. Remember, this accounts for over one-third of your score!
The second key factor is the amount of debt owed. This is known as the utilization rate. Thirty (30%) of your score is based on how you utilize your cards. To maintain a low utilization rate, you must keep your balances low. The amount of debt that you have compared to the amount of available credit determines the utilization rate. Therefore, keep balances less than 30% of your credit limit. For example, if your credit limit is $700, you should not carry a balance of more than $210. Following these 2 simple steps will raise your score to 800 or above!
To begin, you need to have available credit, and you have to use it if you wish to have a great credit score. I’ve seen very wealthy people with poor credit scores because they pay cash, or use their debit cards, and they never established any credit. Most people will have credit cards, a car loan and/or a mortgage. By responsibly using any, or all three, of these areas of credit, you will see your credit score increase over time.
I put a lot of research into which credit cards I wanted before applying. You don’t want to close credit cards if you can avoid it, so I made sure to get the right credit cards that I planned to use in the longterm. I wound up choosing two cards: one that gives me cash back, and another that earns airline miles. Now, I put everything on credit cards and pay them off every month–I never pay interest, and I never carry a balance. This has had the biggest impact on my credit.
Although it has since been paid, I took out a small car loan and paid it off early. As I expected, when I paid off the loan, my credit score increased further. My mortgage is always paid on time. It’s set on auto pay, and I make sure the payment goes out every month so there is never any problem. If a payment is missed for any reason, it can be very difficult to fix it. The best course of action is to proactively make sure your payments are always on time.
If you want to improve your credit, the basic idea is to show that you have credit available to you, that you use it responsibly, and that you’re not maxing out your credit lines. Of course, you cannot have any late payments on your credit report if you want an excellent score. If possible, do not carry a balance over 20% of your available credit. You can use your credit line as much as you want during the month, but do not carry the balance over to the next month. If you do carry a balance, keep it under 20% of your available credit.
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What is a good credit score? I’ve personally maintained an 800+ credit score since I was 21, and also manage the credit line of a large engineering facility. The two biggest pieces of both the FICO scoring model and the VantageScore system are 1) payment history and 2) credit utilization ratios. Getting those right is critical. Payment history is the measure of how reliably you pay your bills, and how long your payment history is. By paying all of your bills on time for several years, you can maximize over 40% of the weight of your credit score.
Your credit utilization ratio measures the percentage of your available credit that you use, and you want it to be as low as possible for a maximum score. If you carry credit card balances from month to month, then the first thing to do is to pay down that debt. Then, even if you pay off your credit card balance in full each month as you should, there are still a few things to optimize. First, it’s important to have a high credit limit, so that your monthly spending never exceeds 20-30% of your total limit, and ideally under 10%. Secondly, you can keep your ratio down by paying your credit card balance off twice per month instead of once per month, so that never more than half of your monthly spending is on the card at any one time.
The final step to maximize your credit score is to have some credit diversity. Your credit mix accounts for about 10% of your score. Lenders want to see that you are capable of handling several types of debt, including revolving credit (like credit cards), and installment loans (like mortgages, student loans, or auto loans). Never take out more debt than you need, but to maximize your credit, it’s a good idea to have at least one
credit card (with no monthly balance) and one low-interest installment loan that you are paying down.
Taking out and churning credit cards is the fastest and cheapest way to raise your score above 800 assuming you are paying full and on-time. I had minimal credit in my name. In three years, I have churned through MANY credit cards, and my score is over 800. I typically sign-up for the best 3-4 card offers per quarter. This is how to get a perfect credit score. If the card is not a keeper, I immediately reduced the credit limit to ensure I can receive future opportunities. I never miss a payment, and I pay in full each month. I regularly pay as soon as I post a significant charge to ensure my utilization rate is low. In three years, I have amassed over two-million miles and raised my score well into the 8’s.
I am a business owner and my husband owns a separate business. Our credit score is 830. I believe that the number one best practice for having a high credit score is consistency. Pay off debt over time, but make sure you are making those payments every month they are due. Do not be afraid to take out loans, but pay them back. Do not take out loans that you cannot afford to pay off. We also pay more than we owe on larger loans – i.e., on our home loan, we pay a few thousand more per month than we need to with the goal of paying off the loan sooner than owed. We always pay off credit card statements each month to avoid high interest debt. For lower interest debt on larger loans, we make an effort to continue to pay down the loans as quickly as possible. We only have credit cards that we need and we never miss a payment. When we needed a loan to purchase the business I own from a publicly traded company, that great credit really paid off!
Your credit score points is arguably the most important three digit number in your
entire financial life. Achieving the elusive 800 credit score is more achievable than you think. In order to improve your credit rating you first have to understand how your credit score is calculated. Your credit score is determined by five main categories. These five categories: payment history, credit utilization, length of credit history, new credit and
inquiries, credit mix, all play an important role in determining your credit score. Knowing how to manage them will make all the difference when improving your credit.
They each weigh on your credit in different ways so make sure to focus first on the ones that will affect your credit the most. Payment history and credit utilization together account for 65% of your credit score. For this reason, it’s a good idea to always make payments on time and not owe more than a certain amount on them. Doing these two things will increase your credit score fast and will keep it high as long as continue
to follow this pattern of paying on time and not owing more than 35% of what is available to you in credit. Remember, this means maintaining your debt below 35% of your total available credit on all your credit accounts. This includes credit cards, car loans mortgages, etc. For most people, simply controlling your credit card debt to stay beneath 35% of what your available credit balance is, will play a major role in managing their
Achieving an 800 credit score isn’t unattainable. Anyone who manages their credit properly can reach and maintain a healthy credit score of 800. Having an 800 credit score will allow you to qualify for better interest rates and terms on future loans and credit card inquiries. Not only will you save money in the long term, but you’ll be viewed as creditworthy.”
Maintain your credit card balances low, this is how to earn the highest experian credit score. While a great rule of thumb is to keep your balances below 30 percent of the credit limit, to reach and maintain an 800 credit score aim to utilize even less than 30 percent. Utilizing 10 percent or less of your credit utilization ratio will ensure you’re on your way to achieving a perfect credit score. Don’t skip a payment. *Your payment history is an important factor that makes up your credit score. The more on-time payments you make and hold on your credit history, the better it is for your credit score. Whether you keep a bill calendar or set reminders on your phone, make sure you never miss any minimum monthly payments.
One late payment could damage your high credit score more than it would someone with an average score. Avoid credit checks. While credit checks are often unavoidable, remember that each time you apply for a credit card, loan or even for an apartment, a hard inquiry is placed on your credit report. Although hard inquiries are only 10 percent of your credit score, it can be the difference between a perfect score and a good score. To avoid multiple credit inquiries, do your research. Before you apply for a loan or credit card ensure that it’s the best option for you so you won’t later apply to another card or loan that better fits your needs.
If you can achieve 800+ credit score you will be eligible for the best available loans at the lowest possible interest rates and most likely you will qualify for the 0% interest rate credit cards. Here are a few tips which will help you to reach the magic mark of 800 credit score. Pay bills on time: Your payment history is probably the most important and
decisive factor to attain the elusive 800 credit mark. The more times you succeed to pay the bills in time, the better credit score you will accumulate and each late payment will damage your credit score. Therefore, try to pay every bill on time by sacrificing other expenses.*
Build long credit history: Borrowers having short credit history are usually considered risky by the lenders. Therefore, to create the better impression and to reach 800 credit score, you should build and maintain a long credit history. Instead of removing from your credit report, you have to keep your credit accounts open, even without balance.*
Keep the usage low: If you can keep your credit usage less than 25% of your total credit limit, then you have the maximum chance of getting a very good credit score. In case of $1000 total credit limit, you must try to owe less than $250 if your target is to achieve 800 credit score. More debt than that limit damages your credit score.*
Have diverse credit: Diversifying your credit account will help you to build a fantastic credit score. Successfully carrying debts of a home loan, an auto loan, a student loan and a mortgage will undoubtedly impress the lenders and the card holder will gain a fantastic credit score. This diversification of debts will provide you extra mileage to reach 800 marks.