July 25th 2023.
What is a Perfect Credit Score?
A perfect credit score is the highest possible credit score, which is 850 according to the two most widely used credit scoring models, FICO® credit scores and VantageScores®. This score is considered exceptional and is usually only attained by people with a proven track record of making timely payments and having a low credit utilization ratio.
What are the benefits of a High Credit Score?
The most significant benefits of having an exceptional credit score are higher approval rates and lower interest rates. People with a credit score of 760-850 will typically have access to the lowest rates on credit cards, personal loans, auto loans, installment loans, and small business loans. Recent legislation stipulates borrowers must have a minimum credit score of 780 for the lowest mortgage rates. In addition, higher credit scores can help secure the lowest insurance rates, especially if you live in a state that allows credit-based insurance policies. A high credit score will also mean a lower security deposit for renters and better perks and rewards from credit card issuers, such as the highest cash-back ratios, 0% introductory APRs, frequent flyer miles, and increased rewards points.
What do people with the Highest Credit Scores have in common?
People with an 850-credit score share some similarities. According to a FICO Study on Understanding the 850 Credit Score, they typically have a long credit history, with an overall account age of 10.5 years and an average oldest account of 30 years. They also have a low credit utilization ratio of 4.1% and a perfect payment history. Finally, they don't have any new inquiries less than a year old and usually don't open any new accounts.
How do I get a Perfect Credit Score?
Getting a perfect credit score is difficult but not impossible. The most important thing is to never miss a payment, since late payments can stay on your report for up to seven years. You should also keep your credit utilization rate low, preferably in the single digits, and only apply for new credit when necessary. Additionally, it's a good idea to check your credit reports regularly for any errors or outdated information that could drag your score down. Finally, consider setting up automatic payments for credit card bills or loan payments to ensure you never miss a due date.
What is a Perfect Credit Score?
A perfect credit score is the highest possible score you can have, which is 850 in the two most widely used credit scoring models – FICO and VantageScores. Generally, if your credit score range is 800-850, you have access to similar loans, interest rates, and rewards programs.
Credit Score Factors
The credit bureaus calculate credit scores on five key factors – Payment history (35%), Amounts owed (30%), Length of credit history (15%), Credit mix (10%), and New credit (10%). These are the components that make up your credit score.
Benefits of a High Credit Score
Having an exceptional credit score means you have access to low interest rates, higher credit limits, lower security deposits, and better perks and rewards from credit card issuers. This includes 0% introductory APRs, frequent flyer miles, and increased rewards points.
What do People with the Highest Credit Scores have in Common?
People with an 850-credit score typically have a long credit history, low credit utilization ratio, perfect payment history, and few recent inquiries.
How do I get a Perfect Credit Score?
Getting a perfect credit score is difficult but doable. You should never miss a payment, keep your credit utilization rate low, only apply for new credit when necessary, and check your credit reports regularly. These actions will help move your score into the exceptional range and could lead to getting a perfect score.
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