The majority of lenders view a FICO score of 800 as excellent credit. About 21.8% of Americans have a credit score of 800 points and higher. If you have a credit score of 800, then it likely means that you’ve managed your debts well and you never miss paying your loans.
How do I get my credit score over 800?
There’s no guarantee that your score will reach 800 but by applying these tips, you may be able to improve your score.
1. Build or Rebuild Your Credit History
15% of your credit score is determined by your credit history, so if you don’t have any credit history, you won’t be able to reach an 800 credit score. To solve this problem, you need to focus on building your credit score. You can do this by either taking out a credit builder loan or applying for your first credit card.
A credit builder loan is a personal loan that helps you improve your credit score by adding positive payment history to your report. Unlike a traditional personal loan, a lender does not directly deposit a lump sum into your account. Instead, it sets money aside in a savings account or certificate of deposit (CD) account, and you gain access to it after paying back the loan.
Using a credit card wisely is another way to improve your credit score. You can acquire a secured credit card in place of a standard one if you don’t qualify for one or don’t want to use one. When you use a secured card, you will need to make a cash deposit into a collateral account, which equals your credit limit.
2. Pay Your Bills on Time
As it makes up 35% of your FICO score, your payment history is by far the most important factor in determining your credit score. Because of this, always pay your bills on time. If your bills go unpaid for 30 days, your creditors can report your debt to the credit bureau. If your credit report reveals a late payment, your credit score can suffer. To avoid paying your monthly bills late, use a calendar to keep track of your payment dates and set up automatic payments.
According to FICO, most people with an 800 credit score or higher pay off their balance in full each month.
3. Keep Your Credit Utilization Rate Low
Your credit usage ratio comes in at number two when calculating your credit score. It accounts for 30% of the total. The ratio compares the total amount of credit you’ve used to the available credit limit on your card. If your total credit line is $10,000 and you’re aiming for a 30% utilization rate, then you should spend no more than $3,000. To improve your credit score, keep the ratio of your debt to income closer to zero percent.
4. Review Your Credit Score and Reports
Monitor your credit score, credit report, and financial status to maintain tabs on how you’re performing. By using online credit scoring services, you can check your credit score for nothing. You might even find advice on how to raise your credit score on some of these websites.
Always double-check your credit reports to make sure they don’t contain any erroneous negative information like late payments or collection accounts as your credit score is based on the information contained there. Inaccuracies can still occur even if you pay all of your bills on time.
If you discover a problem with one of your credit reports, you can have it fixed by filing a dispute with each credit bureau that listed the problem.
How long does it take to get to an 800 credit score?
Depending on where you started from, it can take several years or more to build up an 800 credit score. You need to have a few years of excellent payment history and a good mix of credit accounts showing that you have experience managing different types of credit cards and loans.
A good credit mix consists of several major credit cards, a mortgage loan, and another type of installment loan. To demonstrate your ability to manage diverse credit obligations over an extended length of time, these accounts must be open for a number of years.
What are the benefits of an 800 credit score?
Here are the benefits of having an 800 credit score:
Your credit score, along with your financial information, is one of several factors lenders use when deciding whether to lend you money. A high credit score means that lenders will see you as a safer borrower, increasing the chances they will approve your loan request.
One of the main elements affecting the interest rate on loans is your credit score. An 800 credit score will allow you to qualify for lower interest rates, which will save you thousands of dollars over the life of your mortgage. With larger loans, you’ll see the biggest impact over a longer period of repayments, such as mortgages and car loans.
You may always avoid paying interest by paying off the entire sum on your credit card each month, regardless of your credit score. An 800 credit score may allow you to qualify for credit cards that charge a 0% promotional rate on purchases and balance transfer fees. If you have one of these credit cards, you can carry a balance on your account and avoid paying interest on your purchases.
What is the average interest rate on a car loan with an 800 credit score?
With a credit score of 800-809, the average interest rate for a car loan is 2.40%.
Most car dealerships will offer plenty of incentives for buying their vehicles, including cash rebates, low-interest rates, or special lease deals. Buying a new vehicle will usually come with much lower interest rates than buying a secondhand one.
How much of a home loan can I get with an 800 credit score?
If you have a credit score of 700 or higher, lenders will most likely qualify you for jumbo loans considering the risk level. These loans have loan amounts that exceed $647,200, which is currently the conforming loan limit in most markets. It is the hardest to qualify for if you have bad credit, but with a score over 800, you should find it much easier.
Can a 25-year-old have an 800 credit score?
It usually takes time to build good credit and in the credit scoring system, youth counts against you (in terms of lower scores). It is still possible to establish excellent credit even if you’re in your mid-20s, especially if you’ve been managing bills and credit repayments responsibly since you turned 18.
What is the highest credit score?
850 is actually considered a perfect credit score and the unicorn of the financial world as it is the highest number you can achieve within a credit scoring system. For the FICO Score, one of the most commonly utilized credit scoring models, 850 is a mythical and seemingly impossible figure to achieve but for people with that credit score are possible to achieve.