Last time I checked my FICO score it was 830. I write about credit cards and credit scores for a living, which made me smile. A perfect credit score is supposed to be 850, so I’m just under that.
And guess what? I don’t care if I reach the revered credit score of 850. I’m perfectly happy to be sitting here — in a zen state of mind, no less — with my score of 830.
If you’re tired of chasing after the best possible credit score, you’re going to like what you’re about to find. We will cover these topics:
What is a perfect credit score?
The definition of a perfect credit score depends on the version of credit score used. For many FICO score versions, the range is 300 to 850. Here are the credit score ranges for FICO scores:
- Exceptional: 800-850.
- Very good: 740-799.
- Good: 670-739.
- Fair: 580-669.
- Poor: 579 and below.
A lot of things have to come together to get a perfect 850 FICO score. You need a long and stellar credit history. You need to score high on each FICO score factor: payment history (35%), amounts owed (30%), credit mix (10%), new credit (10%), and length of credit history (15%).
And while 90% of lenders use FICO score models, 10% of lenders use something else. VantageScore is a popular non-FICO scoring option. The VantageScore 3.0 and 4.0 models also range from 300 to 850, but the factors are weighted differently.
Most credit card issuers use either FICO Score 8 or FICO Bankcard Score. The highest you can get with FICO Score version 8 is 850, but the highest FICO bank card score is 900. So you might have a FICO bank card score of 850, but that’s not not a perfect score.
And consider this: someone who benefits from the VantageScore algorithm might score lower with FICO because the factors involved are weighed differently. So if you have a VantageScore of 850, does that count as a perfect credit score?
It probably should be, but what I mean is that there is no official agreed-upon standard of perfection when it comes to credit scores. There are too many versions, even within the FICO brand.
How often does your credit score change?
When the major credit reporting agencies obtain new credit information about you from your lenders, it is not immediately added to your report. There is a verification process that the credit bureaus go through before the data is posted to your credit file. Once your credit report is updated, the new information is taken into account when a credit score is requested by a lender.
But keep in mind that while many lenders report your payment history to all three bureaus, some only report it to one or two. This is why, even if the same credit score version is used, you may have different scores from each bureau. You might have a perfect credit score from Equifax, but a lower score from TransUnion.
Basically, chasing a perfect credit rating is like trying to catch the wind. Do yourself and your sanity a favor. Focus on the credit rating that will get you the best interest rates and access to the best financial products.
Even when I hear people say they have an 850 credit score, I want to ask what version of the score was used and how many bureaus were involved.
I can tell you from personal experience that these questions are not appreciated. So congratulate them warmly and move on.
Why a 760 credit score is all you need
No, you won’t have to turn in your high-level credentials because you’ve decided to make do with a number that isn’t a perfect credit score. But if it’s access to the best interest rates you want, instead of an 850 credit score, aim for a FICO score of 760.
Having a score of at least 760 gets you the best credit cards and the lowest interest rates. When a credit card company determines your annual percentage rate, there is no dean’s list category for a score in the stratosphere.
You can keep shooting for 850 if the trip really makes you happy, but if it’s stressing you out, stop the madness. Enjoy life as a person with a score of 760, which is high enough that you are treated as if you have a perfect credit score.
How to Increase Your FICO Score to 760
Are you more relaxed now? I promise you that dropping the 850 credit score goal will bring sanity back into your credit life. If you’re not at 760 yet, you can take steps to get there.
Consumers who have achieved a credit score of 760 or higher have a lot in common. They all have excellent credit habits. Take inspiration from the best students and you will eventually get a high score too.
Here are six credit habits to help you reach your new goal of a FICO score of 760:
all your bills on time. Your payment history represents 35% of your FICO score. It is essential that you pay all your bills on time, not just credit card bills. Do that and you’re on your way to a higher score.
Your credit usage represents 30% of your FICO score. Your credit utilization ratio is the amount of credit you have used compared to the amount of credit you have. Keep it below 30% for a really good score. But to get a good score, keep it below 10%. People with scores hovering around 800 typically use less than 10% of their credit limits.
This is a sneaky way to ensure that a low or zero balance is reported to the credit bureaus. Find out when your credit card issuer reports payment history to the bureaus each month. Then you can make sure to time your two payments accordingly.
from each credit bureau every 12 months. Due to the recent pandemic, the offices are offering free weekly reports until April 20, 2022. You want to look for errors and signs of identity theft, such as a new account that you haven’t opened. There are three main credit bureaus. I check one of my reports every four months to get an overview of what’s going on throughout the year.
Practicing these habits will help you get — and keep — a pretty high credit score. And they work for just about every version of credit score. Do the right thing in your credit life and you may not have a perfect credit score, but you will be fine.
There are many ways to get a free credit score these days. You probably have a credit card issuer that offers a free score with your monthly statement. These aren’t all FICO scores, but you’ll still get an idea of your credit status. And there are websites that offer free educational scores that highlight factors, such as payment history, that you need to work on.
Also take a look at the many free credit score apps available, such as Mint and Discover Credit Scorecard. You can use these apps to help you track your score. Check out a few and choose the one that feels comfortable to you. It’s really satisfying to see your score improve over time.