My FICO score was 831 the last time I looked at it. I make a living writing about credit cards and credit scores, so that was a nice moment. It’s said that a perfect credit score is 850, so I’m just a little bit short of that.
What do you know? I don’t care about getting a credit score of 850, which is very good. I’m perfectly happy to sit here with my 831 score, and I’m even in a Zen state of mind.
If you’re tired of trying to get the best possible credit score, you’ll like what you’re about to learn about scores.
What’s the best credit score you can get?
It’s not easy to say what the best possible credit score is because it depends on which credit score version is used. For many types of FICO scores, the range is between 300 and 850. Here are the ranges for FICO credit scores:
Exceptional: 800-850.
Very good: 740-799.
Good: 670-739.
Fair: 580-669.
Bad: 579 or less.
To get a perfect 850 FICO score, a lot of things have to work out. You need a long, good credit history and high scores on all of the FICO score’s parts.
Here are the five things that go into figuring out your FICO score:
History of payments: 35%.
How much is owed? 30%.
15% is for credit history.
Credit mix: 10%.
10% is a new credit.
And while 90% of lenders use FICO score models, 10% use something else, like VantageScore 3.0 or 4.0, which also has a range of 300 to 850. But the weights of the different factors are different, so the two score models can’t be compared directly.
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The FICO Score 8, FICO Score 9, or a version of the FICO Bankcard Score is what most credit card companies use. The highest score you can get on FICO Score 8 is 850, but the highest score you can get on FICO Bankcard is 900. So, you might have an 850 FICO Bankcard Score, but that is not a perfect score for that version.
And think about this: someone who does well with the VantageScore algorithm might do worse with FICO because the factors are weighted differently. So, if your VantageScore is 850, does that mean you have the best credit score possible?
It probably should, but my point is that credit scores don’t have an official, agreed-upon standard for perfection. Even in the FICO brand, there are too many different kinds.
When does your credit score get changed?
When your lenders send new credit information to the major credit bureaus, it doesn’t get added to your report right away. Before the information is added to your credit report, the credit bureaus go through a process to make sure it is correct. When a lender asks for your credit score, the new information is added to your credit report after it has been updated.
But keep in mind that some lenders only report to one or two of the three bureaus, even though many report to all three. This is why, even if the same version of your credit score is used, each bureau can give you a different score. Your credit score from Equifax could be perfect, but your score from TransUnion could be lower.
A perfect credit score is basically like trying to catch the wind. Do yourself a favour and save your sanity. Pay attention to your credit score if you want to get the best interest rates and the best financial products.
Even when someone says they have an 850 credit score, I want to know what version of the score was used and how many bureaus were involved.
From my own experience, I can tell you that these questions are not welcome. So just tell them how happy you are for them and move on.
Read: Best Credit Cards with Reward Points.
Is a score of 760 a good one?
No, you won’t have to give up your high-achiever credentials just because you chose to get by with a credit score that isn’t perfect. But if you want to get the best interest rates, you should aim for a 760 FICO score instead of 850.
You can get the best credit cards and the lowest interest rates if your score is at least 760. When a credit card company figures out your APR, there is no place for a score in the stratosphere to go in the «dean’s list» section.
You can keep trying to get an 850 if the journey makes you happy, but if it stresses you out, you should stop being so crazy. Enjoy life as a person with a 760 score, which is high enough to be treated as if you have a perfect credit score.
Keep in mind, though, that a new federal rule says you need at least a 780 to get the best mortgage rates.
How to get your credit score up to 760
Do you feel more calm now? I promise that if you give up on getting an 850 credit score, your credit life will get back to normal. You can take steps to get to 760 if you’re not there yet.
People with a credit score of 760 or higher have a lot in common. All of them have good credit habits. If you act like people with high scores, you’ll eventually get a high score, too.
Here are six things you can do to get your FICO score up to 760:
Pay your bills when they are due. 35% of your FICO score is based on how you’ve paid your bills in the past. Not just credit card bills, but all of your bills must be paid on time. If you do this, you’ll get a better score.
Keep credit card balances as low as possible. 30% of your FICO score is based on how you use your credit. How much credit you’ve used compared to how much credit you have available is your credit utilisation ratio. If you want a very good score, keep it under 30%. But if you want a good grade, keep it below 10%. People with scores between 800 and 850 usually use less than 10% of their available credit.
Twice a month, pay your credit card bill. This is a sneaky way to get the credit bureaus to report a low balance or no balance at all. Find out when each month your credit card company sends your payment history to the bureaus. Then you can make sure your two payments are made at the right times.
Read: Best Credit Cards with Cash Back.
Don’t apply for new credit too often. Your credit score could drop a few points every time you apply for credit. So don’t apply for credit all at once, and don’t apply for credit unless you really need it. Also, credit card companies don’t like it when their customers try to get a lot of credit quickly. It makes people who give you credit think you may be desperate for money. And trust me, that will lead to nothing good.
Don’t get rid of old credit cards. Keep your credit card accounts open unless you have a good reason, like a high annual fee. If you close an account, you lose the available credit, which can make your credit utilisation ratio go up. And if your ratio goes up, it’s likely that your credit score will go down.
Check your free credit report every year. Every year, you can get a free credit report from each of the three credit bureaus. Right now, you can get a free credit report every week, but if you don’t have a problem with your credit, you don’t need to check it that often. I usually look at one of my reports every four months to see what’s going on over the course of the year. Look for mistakes and signs of identity theft, like a new account you didn’t open, when you look at your reports.
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How to Get a Credit Score for Free
Today, there are a lot of ways to get a free credit score. Your credit card company probably sends you a free credit score with your monthly bill. Even though not all of these are FICO scores, you’ll still get a good idea of how your credit is doing. And there are websites that give you free educational scores that show you what you need to work on, like your payment history.
Also, check out some of the free credit score apps, such as Mint and Discover Credit Scorecard. You can keep track of your score with these apps. Check out a few and pick the one that makes you feel most at ease. It’s a lot of fun to see your score go up over time. Just don’t think about it too much.