Both FICO® and VantageScore®, two of the most commonly used credit scoring models, set the maximum credit score at 850. A higher credit score is considered better than a low credit score, indicating that you are more likely to handle your debt responsibly.
If you are interested in achieving an 850 credit score, read on to learn more about how you might do so, as well as tips on building a credit score in general.
Key Points
• The highest possible credit score is 850 according to FICO and VantageScore models.
• Paying bills on time is crucial for achieving a high credit score.
• Maintaining a low credit utilization rate helps build credit scores.
• Frequent credit applications can negatively impact credit scores.
• A score of 800 or above is generally sufficient for obtaining highly favorable loan terms.
How Do Credit Ratings Work?
The different companies that calculate credit scores have different credit rating scales. These scales generally divide credit scores into five different categories: poor, fair, good, very good, and excellent. Each of these ranges spans a number of different credit scores, and can be a good way to understand your credit at a glance.
Here’s how the FICO Score, one of the most popular credit-scoring model, groups its credit categories:
• 300-579: Poor
• 580-669: Fair
• 670-739: Good
• 740-799: Very good
• 800-850: Exceptional or excellent
What Factors Affect Credit Scores?
Different companies use different factors (and in different proportions) when calculating credit scores, which is why you have different credit scores. Generally, the following five factors affect credit scores:
• Payment history: This reflects whether you’re paying your bills on time.
• Credit utilization ratio: This reflects what percent of your credit limit you are using (30% or less is a good guideline).
• Length of credit history: This shows how long you have been managing credit (longer histories typically yield higher scores).
• Credit mix: Credit bureaus may positively impact your score if you successfully handle different types of credit, such as installment loans and lines of credit.
• Recent credit inquiries: Having too many credit inquiries in a short period of time can negatively affect your credit score.
How to Check Your Credit Score
While you can check your credit report for free from the major credit bureaus, your credit report usually won’t contain your actual credit score. Instead, there are a number of different ways to check your FICO Score or VantageScore or other types of credit score:
• Through your credit company or other financial institution, such as on a loan statement
• From one of the major credit bureaus or other providers
• On a free credit scoring website, such as AnnualCreditReport.com, or other credit score service
Why Should You Have a High Credit Score?
Having a high credit score can have a positive impact on your overall financial situation. In fact, a good credit score is one of the most important assets you have in life. If you have a bad credit score, you may not be able to get approved for credit cards or other loans. And even if you are approved, you may have to pay higher interest rates than borrowers with better credit scores.
Tips for Trying to Achieve a Perfect Credit Score
If you’re aiming to achieve the highest possible score of 850, know this: There are diminishing returns the higher your score is. In other words, while there may be a real financial impact to building your credit score from 650 to 700, you won’t see as much of an impact by building your score from 800 to 850. Even though it’s not the highest credit score possible, a credit score of 800 is likely high enough that you stand a good shot at qualifying for most loans at the lowest available interest rate.
That said, here are a few tips if you want to try to achieve a perfect credit score.
Never Miss Payments
One of the best things you can do to positively affect your credit score is to always pay your bills on time, each and every month. Having delinquent or past-due accounts can have a major negative impact on your credit score.
Keep Your Credit Utilization Rate Low
Your credit utilization ratio is defined as the percentage of your available credit that you are actively using. So if you have a single credit card with a $10,000 limit, and you’re carrying a balance of $1,000, your credit utilization ratio is 10%.
Your credit utilization ratio is one of the largest factors that makes up your credit score. Generally aim to keep it at 30% or lower.
Avoid Applying for Credit Too Often
Another factor that makes up your credit score is how often you apply for new credit. Because of this, you’ll want to be judicious when applying for a new credit card or any other form of loan. Too many applications within a short window of time can raise a red flag for lenders.
Keep Accounts Open and Active
The length of your credit history contributes to your credit score, with a longer history being better than a short one. For this reason, keeping accounts open, even if you don’t use them often, can help you maintain or build your score. What’s more, additional credit accounts being kept open can pump up your overall credit limit, which can lower your credit utilization.
Review Your Credit Reports
It’s also a good idea to regularly review your credit reports, especially if you have a starting credit score you’re trying to build. That way, you can make sure there isn’t any inaccurate or incorrect information on your report. If you do find missing or inaccurate information, contact the credit bureau to have it corrected.
Get a Secured Credit Card
If you don’t have the minimum credit score for a credit card, you might consider applying for a secured credit card. With a secured credit card, you put down a refundable security deposit upfront, which then serves as your credit limit.
As you use your secured card responsibly, building up to a fair credit score or even a good one, you might be able to later upgrade it to an unsecured credit card.
Become an Authorized User
Another way to work towards a perfect credit score, especially if you are starting out in your credit journey, is to become an authorized user on a credit account of a trusted friend or family member. As long as your friend or family member is responsible with their credit usage, it can help build your credit score as well.
Pay Your Bills Regularly
Again, one of the best things that you can do for your credit score is to pay your bills regularly. This means setting up a budget and making sure that your income exceeds your expenses, with a little left over each month to stash in savings. That way, you can always make sure to pay your bills while having an emergency fund to cover any unexpected financial situations.
The Takeaway
There are a few different companies that generate credit scores, and the methodology that each one uses varies slightly. In the most popular credit score models, the highest credit score possible is 850. While it’s generally advisable to work toward improving your credit score, it may not be worth it to overly focus on getting a perfect credit score.
Having a very good credit score or an excellent one that is less than 850 can still qualify you for the most favorable rates on credit products, such as credit cards with robust rewards.
Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.
FAQ
What effect does an 850 credit score have?
If you have an 850 credit score, you are much more likely to get approved for any new loans or credit cards that you apply for. You’ll also likely be eligible for the lowest possible interest rates. These are a few of the reasons it’s beneficial to have as high a credit score as possible.
Which credit scores are most widely used?
Two of the most popular companies and credit scores are VantageScore and your FICO Score. However, there are several companies that have their own methodologies and credit scores. This is why you have different credit scores.
Which credit score do banks use?
Different banks, lenders, and credit card companies may use different credit scores. FICO Score is one of the most popular, but if you’re not sure which credit score your bank uses, you might be able to ask their customer service department or look for an answer online.
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This content is provided for informational and educational purposes only and should not be construed as financial advice.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
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