If you were someone who wasn’t satisfied in school unless you had a report card filled with As, then maybe a blemish-free 850 credit score is your adulthood equivalent. You’ve heard it exists, but you’ve yet to see the perfect credit score yourself.
But that may be OK, as “there is absolutely no advantage to having [an] 850 versus any other 800 number (or even high 700, in most cases),” Thomas Nitzsche, media relations manager for ClearPoint Credit Counseling Solutions, said in an email.
Is Perfection Possible?
While it may not be essential, the fact of the matter is, getting a perfect credit score isn’t easy. Credit scoring algorithms are complicated, and even if you do take a look at your credit and see a gold-star 850, it’s unlikely you’ll keep it forever.
“A perfect score is possible but very rare,” Nitzsche said.
And, really, once you have what is deemed “excellent credit” — typically seen as about 750 on a 300 to 850 scale, which most major credit scoring models follow — you’ll likely qualify for the best interest rates and credit products anyway. Whether you have a score of 780 or a perfect 850 won’t make much of a difference to anyone (except you, if perfection is your thing).
Good Habits That Lead to Excellent Credit
What we’re saying is that, yes, you can get perfect credit, but you don’t have to. However, working toward having great or excellent credit is certainly something to strive for. So, how do you do it?
“If you pay your bills on time, keep your balances low and apply for credit only as needed, over time you can build the credit scores you need to get the credit you want without unnecessary stress or frustration,” Rod Griffin, director of public education at credit bureau Experian, said in an email.
In addition to having a strong payment history, good debt usage (which experts say is at least 30%, and ideally 10%, of your combined credit limit) and few hard inquiries, it’s important to note that your age of credit and diversity of credit accounts are other factors impacting major scores. (To see where your credit currently stands, you can review your free credit report summary, updated each month, on Credit.com.)
And organized perfectionists rejoice — getting a good credit score is your time to shine.
“Those who set reminders, obsess over due dates and outstanding debt, notice when bills are missing, etc. have an advantage over those who are more impulsive,” Nitzsche said.
What to Avoid
Nitzche said it’s important to stay current on payments, as missing one can harm your score and keep (or significantly delay) you from achieving credit perfection.
“Payment histories remain on your credit report for 7 years, so missing just one payment can haunt you for a long time,” Nitzsche said.
He added, “Beyond this, the most common problems we see are folks not using credit at all (thus having low scores) and consumers who overextend themselves, using too much of their available credit.”
Griffin pointed out that you should avoid comparing your scores to other people’s, as that’s not what lenders are doing.
“It is possible for two people to have the same credit scores but for very different reasons,” Griffin said. “The only way to know what you need to do to maximize your credit score is to identify the specific items from your personal credit history that are most affecting your personal credit score.”
Now’s the Time to Start Building Good Credit
So, whether you’re after that perfect 850 or just want a score that will help you get better terms and conditions on your lines of credit, it’s never too late to start.
“Don’t wait until you need good credit to start working on a great credit score,” Nitzsche said. “It may not feel like it right now, but you will likely have financial goals in the future that require a good credit score — or that will be easier if you have a great credit score.”