It may seem like the perfect credit score is out of reach- something that’s impossible to achieve. However, there are plenty of people who’ve reached it! If you want to get a perfect credit score, you’ll need to make some changes to how you manage your finances.
Credit scores naturally fluctuate, so your score won’t be perfect all the time. You can work towards this goal by always paying credit bills on time, using different credit sources, keeping old accounts open, increasing your credit limit, and monitoring your credit report closely.
Is a Perfect Credit Score Possible?
In 2019, the average credit-holding American scored 703, which is good credit. Since 2013, Americans have had steadily growing credit scores as well. However, only a tiny percentage have the perfect score.
That makes many people wonder if it’s actually possible to see a perfect credit score on their account. Excellent scores are tough to get and maintain, but it is possible! If you want one, you’ll need to work hard to change your credit situation.
Those with the highest possible score of 850 manage their debts differently from others. Overall, perfect scores are associated with many credit accounts but lower than average amounts of debt.
People are usually surprised to hear that 850 score-holders have plenty of credit accounts. You can work towards raising your score by copying what they do.
How To Achieve a Perfect Credit Score
If you want to get a perfect credit score, you’ll want to replicate the financial actions of those that already have it. Those with a score of 850 do these seven things:
- Pay credit bills more often than once a month, sometimes weekly
- Always pay on time and never skip payments
- Have a mix of credit accounts, including loans and credit cards
- Raise credit limits when possible
- Keep old accounts open
- Check on their credit score often for mistakes
- Finally, they only apply for credit when they know they need it
If you also do all these things, your credit score is sure to improve! It can take years to get a perfect credit score, so keep in mind that it’s a long-term goal.
1. Pay Credit Bills More Often
First, start by making more payments on your credit balances. You want to pay more often than once per month for the best results. Many people with high scores pay weekly or every other week.
You’ll need to work out a budget to pay down your debts. A high score requires low debt utilization, which means you have a high credit limit, but a low balance. Experts say you should always have your utilization rate below 30%.
2. Always Pay on Time
Next, paying your credit bills on time is the most critical step that you can take. You want to pay on time and never skip paying on any of your accounts. Your payment history makes up the most significant portion of your FICO credit score, at 35%.
That means paying on time can significantly raise your score, but missing payments can drastically lower it. There may be times when you can’t afford to pay, but you should reach out to the credit company and let them know when you can. Doing so often helps reduce adverse effects.
3. Have a Mix of Credit Sources
You also want to have a mix of credit sources. You should have multiple credit cards and loans, but don’t take out more than you can afford! Its important to understand how loans affect your credit score.
You’ll need good financial skills to manage multiple sources. Never add more than one new credit account at a time, so you can determine how well you manage the addition first.
4. Work on Raising Your Credit Limits
The higher your credit limit, the more likely you will have a low utilization rate, increasing your credit score. You can reach out to the credit company and ask for a higher rate. Although they usually raise it with time, you can pay them back as you show.
5. Leave Your Old Accounts Open
Old accounts positively impact scores, so you don’t want to close your old accounts. Instead, find ways to keep using them, even if it’s very sparingly; having old accounts can impact your score by 15%
6. Review Your Credit Score Frequently
Next, make sure you check on your credit score at least once a month, although more often is better. That way, you can catch and report mistakes. You can request that mistakes be removed from your report and hopefully this should raise your score.
7. Don’t Apply for New Credit Often
Lastly, you should only apply for a new credit line when you need it. Credit suppliers make hard inquiries when you apply, which lowers your score.
If you must apply for more, make sure to give at least six months between applications. That way, your score has time to recover between them.