The 800 Credit Score: What It Means and 5 Steps to Get There
A company who wishes to become eligible for low-interest credit loans may opt to aim for an 800 credit score. The score is far from perfect, but it places you within the highest tier of FICO® scores☉, with 90% of top lending companies using your score.
Only 23% of all consumers have FICO® Scores of 800 or higher. If you’re one of these extremely credit-worthy consumers, excellent work. You’ve proven to lenders that you’re an excellent borrower with a high credit-worthiness score than the typical consumer credit score of 714.
If you’re looking for a good credit score, this article will inform you of the benefits of outstanding credit, and how to achieve the highest score possible.
What Does It Mean to Have an 800 Credit Score?
It’s no assurance that you will have access to the best credit products or the best terms available with an 800 credit score. Lenders take into account your earnings, employment history, and debt in addition to your credit. Still, lenders are less likely to reject your loan application because of your credit history because they’re inclined to accept it if a credit score is 800 or higher.
Your credit score (800) exemplifies your sustained creditworthiness. You have a long credit history, and you have made all your payments on time. You use a relatively small amount of your total available credit, and you’ve had a good mix of credit, meaning you clearly have good credit habits.
The Benefits of Achieving an Exceptional Credit Score
Being a member of the “800 club” could open up room for greater interest and rewards, including: higher interest rates.
Regardless of the particular kind of credit you’re applying for, it may be comforting to know that your 800 credit score likely exceeds your lender’s minimum credit score criteria. As long as you meet the eligibility requirements, like income and employment, your odds of approval are high.
An 800 credit rating increases your chances of landing favorable credit card offers, like ones available only with substantial credit score. Credit card companies and mortgage companies are also more likely to honor your requests for account funding.
Your proven credit record can result in higher offers on interest rates, saving you hundreds, even thousands, of dollars on mortgages, car payments, credit cards and personal loans.
Having a higher credit rating allows you to receive greater credit limits, which augments your buying potential. High credit limits are also useful due to their capacity to keep your credit utilization ratio low, helping you maintain a good credit rating.
Most states allow insurance companies to take a credit-based insurance score when calculating your premium. Thus, if you score near-perfectly on your credit, your insurance company may lower your premium on your home or auto.
1. Pay Your Bills on Time, Every Time
One way to show lenders you’re a conscientious payer is to pay your bills as soon as they are due. The payment history is the biggest factor in the FICO credit scores, accounting for 35% of your FICO Score, so it is essential that you pay your bills on time.
Fortunately, it is best that you don’t miss a scheduled payment, as it can have dire consequences on your credit rating. Generally, your lenders may not report late payments to the credit bureaus for 30 days, so make sure you pay all your outstanding bills by then.
2. Keep Your Credit Card Balances Low
Your credit utilization ratio―or your balance-to-limit ratio―is the second most influential credit score factor. Your credit utilization ratio, also known as your balance-to-limit ratio, reveals your credit usage as a fraction of your total credit limit. Consider the above example, where if you had a $1,000 balance on a credit card with a $4,000 limit, your utilization ratio is 25%.
Your utilization percentage is calculated individually for each credit card as well as for all credit card accounts collectively.
Consumers with a credit score of at least 800 have an Average Utilization Rate, or AUD, of 1
3. Be Mindful of Your Credit History
How long you’ve been managing credit accounts for 15% of your credit score. Commonly, the longer your credit history, the better your credit score. Credit models may factor in the age of the oldest account, whether new accounts have been added, and the average age of all your accounts.
Before closing a credit account in good standing, be sure to weigh the prospective consequences. Closing the account can decrease the length of your credit history and your credit rating, which could negatively impact your score. If you’re closing a credit card you are not currently using, consider requesting your card issuer to downgrade you to a card with no annual charge instead.
4. Improve Your Credit Mix
Perhaps an additional credit account would be helpful, especially in case you need a type of credit that you do not already have. For example, if you have only installment loans, like a car loan or a personal loan, adding a credit card may help diversify your credit mix, which accounts for 10% of your credit score. And, by boosting your credit limit, you’ll also reduce your credit utilization ratio.
5. Review Your Credit Reports
You may be unfairly evaluated because of your credit rating. It’s possible that the reports contain inaccurate data that may be damaging your credit. Reviewing your credit report regularly can help you identify and dispute erroneous information with the lender on whom the information has been provided. It can also be beneficial to dispute the errors with the company that provided the information to the credit bureaus.
You can request a free credit report from Experian, TransUnion, and Equifax each week through December 31, 2022, at AnnualCreditReport.com. You may also request your free credit score and report from Experian online.