When it comes to credit scores, many people wonder how to achieve that elusive perfect number. While a perfect credit score sounds impressive, the truth is, you don’t actually need a 850 to unlock the best financial opportunities. Once your score reaches a high range, typically above 760, you’ll already qualify for the best interest rates and credit offers. Still, striving for a higher score can be a good goal if you want to ensure you’re maintaining the best financial habits.
What is a Perfect Credit Score?
Credit scores range between 300 and 850, with 850 being the highest possible score. This number is a reflection of your creditworthiness, or how likely you are to repay borrowed money on time. Your score is determined by several factors, including your payment history, the amount of debt you owe, and how long you’ve had credit.
While a perfect 850 may seem like a trophy worth pursuing, most people don’t need to stress about achieving it. A score in the mid-to-high 700s is generally enough to secure the best loan rates, credit cards, and other financial perks.
That said, if you’re interested in improving your score or even aiming for that perfect 850, here are a few tips to help get you closer.
How to Get a Perfect Credit Score
1. Pay All Your Bills on Time
Your payment history is the most important factor in your credit score, accounting for about 35% of the total score. Even one missed or late payment can cause your score to drop significantly, so staying on top of due dates is crucial.
Tip: Set up automatic payments for all of your bills, or use calendar reminders to ensure you never miss a payment.
2. Keep Your Credit Utilization Low
Credit utilization refers to the percentage of your available credit that you’re using at any given time. Experts recommend keeping this number below 30%, but for optimal results, try to keep it below 10%.
Example: If your total credit limit across all cards is $10,000, aim to carry no more than $1,000 in balances at any time.
If you’re close to maxing out your cards, it can signal to lenders that you’re relying too much on credit, which can hurt your score.
Tip: If possible, pay off your credit cards in full each month to keep your balances low.
3. Don’t Close Old Accounts
The length of your credit history is another key component of your score. Closing an old account can reduce the average age of your credit, which can hurt your chance at a perfect credit score. Even if you don’t use a card often, keeping the account open helps to maintain a longer credit history.
Tip: If you have old credit cards you rarely use, keep them open and put a small recurring charge on them (like a subscription service). Just be sure to pay it off each month to avoid carrying a balance.
4. Diversify Your Credit Mix
Having a variety of credit types can help boost your score. This includes a mix of credit cards, loans, and other types of credit. It shows lenders you can manage different types of debt responsibly.
Tip: If you’ve only ever had credit cards, consider taking out a small personal loan or even a car loan if needed. Of course, only take out new credit when it makes financial sense.
5. Limit Hard Inquiries on Your Credit
Each time you apply for new credit, a “hard inquiry” is added to your report, which can lower your score slightly. While one or two inquiries won’t hurt too much, applying for too much credit in a short period can signal to lenders that you’re desperate for credit.
Tip: Be selective about applying for new credit. If you’re shopping around for a loan or mortgage, try to do all your inquiries within a 14-45 day period, so they’re grouped together as one inquiry.
6. Regularly Check Your Credit Report
Even if you’re doing everything right, errors on your credit report can still occur. Regularly checking your report can help you catch any mistakes and correct them before they damage your score.
Tip: You can get a free credit report from each of the three major bureaus (Equifax, Experian, and TransUnion) once a year through AnnualCreditReport.com. Spread these out throughout the year so you can monitor your credit more often.
Is a Perfect Credit Score Necessary?
As mentioned earlier, while a perfect 850 credit score looks great on paper, it’s not necessary for most people. Once your score is in the high 700s or low 800s, you’ll already be getting the best offers and interest rates from lenders. The difference between a score of 820 and 850, for example, is virtually meaningless in terms of financial benefits.
The key takeaway is that building and maintaining a strong credit score takes time and consistency. By following these tips, you’ll not only improve your score but also maintain healthy financial habits that will serve you for years to come.
In Summary:
- Pay all bills on time, every time.
- Keep credit utilization below 10%.
- Avoid closing old accounts, even if unused.
- Diversify your credit mix with different types of loans.
- Limit hard inquiries by being selective about new credit.
- Regularly check your credit report for errors.
Focus on these steps, and you’ll see your credit score improve—and who knows, you may even get close to that perfect 850! However, remember that chasing perfection isn’t necessary for financial success. A high score will open doors to all the best rates and opportunities, whether it’s 820, 780, or anywhere in between.
