When it comes to your credit score, the higher it is, the better it is. But just how high can you get this three-digit number?
Both FICO and VantageScore, the most widely used scoring models, use a scale that ranges between 300 and 850.
Three-hundred marks the lowest possible boundary. The closer you get to this number, the more challenges you’ll face when taking out a loan or line of credit.
While there are financial institutions that may grant financing to people with subprime credit, these options may come with higher fees. If you’re a subprime borrower, you may want to check out the financial borrowing options at CreditFresh for more information about bad credit personal line of credit options.
On the opposite end of the spectrum, 850 is the highest credit score possible. It increases your chances financial institutions may grant you a personal loan or line of credit at more affordable rates.
How Many People Have It?
It’s an exclusive club. Roughly one percent of FICO consumers can boast this perfect credit score, while less than one percent of VantageScore consumers can say the same.
Far more people fall somewhere in the middle of the spectrum. In 2019, the average American credit score climbed to an all-time higher of 706.
This suggests good things for the country’s borrowers, as 706 falls firmly in the good category of both FICO and VantageScore’s rating systems.
Do You Really Need a Perfect Credit Score?
Nope — a perfect credit score is absolutely unnecessary. FICO shows any prime score of 760 or higher will generally unlock the same deals as a score of 850.
In other words, the exact three-digits of your score may not hold as much weight as your rating.
When it comes to FICO, here’s the breakdown for each rating:
Very Good: 740–799
Very Poor: 300–579
How Do You Get the Highest Credit Score, Anyway?
If you’re a competitive sort who wants the best of the best in everything you do, you’ll need to commit to adding positive entries to your report.
But that’s not all.
Many of those consumers with a score of 800 or higher will have records that go back around 25 years. An experienced file filled with good entries is a necessity — making an 850 difficult for consumers just starting out to build up their history.
But with time and dedication, you may be able to boast an 850 one day. Following these tips may help you get there.
- Pay bills on time — even one single late payment may dash your hopes
- Keep line of credit or credit card balances below 10 percent of available limits
- Have a variety of personal loans and other accounts, provided they’re all in good standing
- Rarely apply for new accounts
- Be patient — it takes time to develop of lengthy history filled with only good entries
Your score is an incredibly sensitive number, and it gets touchier the higher you go. Any deviation from these tips above may see your score drop. But remember, a less-than-perfect score may not spell disaster for your finances. There’s a financial product available for every score on the spectrum.