The perfect credit score. 850. That is the highest credit score anyone can get on a scale of 350 to 850. So few people have a perfect 850 score, so it’s regarded as almost a unicorn in the financial world. So how do you get a perfect credit score? Well…
Getting a perfect credit score is both pretty simple and very difficult. Based on how credit score metrics work, you simply need to have very little credit utilization, consistently paying on time, having a good mix of credit accounts, and having your credit accounts mature. Just to name a few.
So is it possible? Yes. Is it a pain in the butt? Yes. Is it worth it? That’s all we’re going to find out.
1. Pay your bills on time, every time
One single missed payment on your credit report might ruin your chances of a perfect 850 forever! And that’s not an exaggeration. Your on-time payments are the most important factors that affect your credit score and need to be at 100%. Miss one payment and your score might plummet more than 50 to 100 points.
Payments are usually not considered late until 30 days after their due date. Sure, you might end up paying late fees to your bank, but they don’t report your late payment until it’s at least 30 days late. So start here.
2. Pay off your cards every month
This one is a good controversial item. There is a misconception floating around out there that he needs to have a balance on your credit cards to improve your credit. That is simply not true. As long as you pay your credit cards off every single month, or even carry over a $0 balance, they are all considered as on-time payments.
If you occasionally carry a balance over month-over-month, always make sure that you make every single payment every single month. Without fail!
3. Avoid opening new credit lines
Once you have three or four revolving lines of credit (i.e credit cards) then it’s time to slow down and not open any new credit lines. You know all those store credit credit cards you’re offered at the checkout? Or the random pre-approval letters you get from banks? Yea, definitely ignore those.
Every time you open a new credit, a few things happen. First, your credit score takes a ding because the lender performs a hard credit inquiry. This usually results in about a 5-point drop. This usually wears off over time, but if you’re in search of the perfect credit score, then this isn’t good.
The second thing that happens is that your average age of credit also drops. Every time you open a new line of credit, it’s only a few days old. Your average age of credit is then pulled down and lowers your credit.
So, early on in your credit score building Journey, then you are free to open up new lines of credit. Once you have all you need, then avoid opening any new ones unless necessary.
4. Mix up your credit accounts
You need 21 or more lines of credit to get an excellent credit score. The easiest way to get a high number of lines of credit is to open a bunch of credit cards. Like I said before, you don’t want to be opening up new credit cards later on in your perfect square Journey.
21 or more accounts is a lot. Makes me cringe to imagine having 21 different credit cards floating around. So if you have a mortgage, car payment, and line of credit, that already count is 3. Only 18 more to go. Sounds ridiculous I know 🙂 If you really want that 850 credit score, then you better get going!
5. Use all your credit cards from time to time
One thing that can mess up a really good running is closing an old credit card. Since your age of credit contributes about 15% of your credit score Karma you don’t want to accidentally end up closing an old credit card.
Banks and lenders close good standing accounts if they aren’t being used. So always make sure to pull out that old credit card and occasionally use it.
Is a perfect credit score worth it?
Short answer? No. Having an 850 credit score is really nothing but having bragging rights. You have the same perks and benefits that a person with a 750 credit score has.
Once you reach the 750 mark, you basically get the best rates lenders offer. You get the best credit card interest rates, mortgage rates, and even the best car loan rates.
An 850 credit score is definitely nothing to be laughed at. It’s really really hard to get a score that high, and it’s definitely something to be proud of. I personally see it more as a game, and how high of a score I can get. It really doesn’t come with any benefits in the real world.
Hope that helps 🙂
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