In the financial lives of every individual, a credit score is among the most important numbers. From loan interest rates to rental applications and employment offers, it affects almost every element of life. Regarding borrowing credit and other services, a person's position is better the higher their credit score.
Variably between 300 and 850, the FICO Score is one of the most often-used credit rating systems available in the United States. Well, can one get an even better mark of 900 since the highest achievable score is 850? In essence, the answer is no; however, it would still be really remarkable to score the 800s and maintain it.
What is a Credit Score
Your credit score measures your credit rating numerically between 300 and 850. Using the information in your credit reports from the three main consumer reporting agencies—Equifax, Experian, and TransUnion—credit scoring systems build models.
One should realize that these organizations do not generate the scores. Organizations like FICO and Vantage score, however, create the scores using a formula and models they create using the data from the credit reports. Here we are discussing your payment history, credit use ratio, length of credit history, kinds of credit you have, and current credit application count.
Credit Scores are Known to be on the Scale of 300 to 850
Well, where does 850 come from as the highest FICO score you can get while it is a range that starts from 300? All that FICO has in essence done is assign a value of 850 as the maximum achievable score according to its methodology. Scoring 850 means that you are a credit risk-taker of the lowest order and almost certain not to fail to honor debts or any credit facilities.
It’s important to remember that only 0. 3% of people with credit scores attain 850 — the scale is so high that most individuals can’t even attain a FICO Score within the range. However, according to FICO, the most recent data reveals that the average credit score is as high as 716, the best it has been.
The Top FICO Rating and What It Takes to Achieve It
It is important to note that a 900 FICO score is no longer achievable, but all efforts should be made to boost your credit. Any score higher than 800 is considered to be very good and allows receiving the best credit terms.
Here is what it typically takes to reach FICO’s maximum score: Here is what it typically takes to reach FICO’s maximum score:
- None of the credit reports contain any missed payments or other unfavorable entries.
- Multiple accounts, including credit cards, auto loans, mortgages, and many others have been using credit for many years.
- Minimize credit card utilization, this should be below 10% of the limit.
- Fewer applications for loans or credit cards
- A significant proportion of credit card accounts as well as both closed-end (fixed loans) and open-end (revolving loans) consumer loans.
A large number of 800+ credit scores are characterized by the presence of active old accounts and several sometimes new accounts which are paid on time and have no negative marks. It proves to the employer that you are capable of handling various credits responsibly in the future.
How Do You Define a Good Credit Score?
You may be tempted to believe that only something close to par excellence is useful, but that is not true at all. A good credit score that positions you well for most credit products, including low interest rates, starts closer to A good credit score that positions you well for most credit products, including low interest rates, starts closer to:
- FICO: 670
- VantageScore: 680
And even if your score is in the ‘fair’ category, the FICO score of between 580-669 or the VantageScore of between 601-679 you will be accepted for credit, but you’ll enjoy the credit with less beneficial interest rates and other fees. Getting constructions built up past the 700 mark brings much better offers into the fray.
What Credit Score is Required?
It is important to note that you do not require an 850 credit score to get the best credit offers, be it mortgages, auto loans, or prime credit cards. However, the higher the credit score is, the more favorable positions one will be provided with the best rates and conditions given by the lender. This table gives an overview of different credit product tiers: This table gives an overview of different credit product tiers:
Credit Cards
-
Excellent: 740+
- Good: 670-739
- Fair: 580-669
- Auto Loans
- Excellent: 781+
- Good: 661-780
- Fair: 601-660
- Mortgages
- Excellent: 760+
- Good: 680-759
- Fair: 620-679
- Personal Loans
- Excellent: 720+
- Good: 660-719
- Fair: 580-659
Each lender has his criteria concerning creditworthiness, however, if you aim for the best of the best, your FICO Score should exceed 700 and better yet – 740.
Is It Possible to Achieve a Credit Score of 850?
Now that you understand the impossibility of having a 900 credit score, how about that “ideal” 850 FICO score? Yes — but very, very few people can achieve it. As mentioned earlier, there is virtually no explanation for obtaining a score of 850 other than a perfect credit history. This means that one late payment made years ago or even a single percentage point higher on your utilization of your credit card this month can lead to a few points down on your score.
However, it is possible to have excellent credit which ranges from 800 and above and this can be achieved in the long run for those borrowers who are willing to fully stick to the rules of credit repayment. Paying your bills on time, maintaining a low credit utilization ratio, and applying for credit only when necessary will help to build up the score gradually. It would not be surprising that those landing the perfect 850 have never missed a payment in their life, maintain card balances below five percent of their limit, and possess positive credit histories spanning more than two decades in mortgages, credit cards, auto loans, and more.
Still, the best auto loan or credit card rates are going to go to borrowers with a score between 700 and 799. However, aiming for 850 will not negatively affect it if your credit management practices fit the requirements for getting high credit scores.
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