850 credit score: It is the best credit rating anyone can score under the FICO and VantageScore credit scoring systems, which are on a 300 to 850 scale. However, as mentioned earlier, even 850 is considered to be a perfect credit score, yet few people manage to achieve such a number. Now let’s find out who among the credit users has been able to attain this dream of a peak credit score.
Reaching the 850 Mountaintop
Even though the number of people with an 850 credit score is small; seeing that it is below 1% of the total number of consumers according to most projections, some consumers have been able to attain this high level of credit score. Generally, those who do have invested time and effort in developing their credit profiles to be perfect or as close to that as possible.
An 850 credit score means that the individual handles credit as if they have never been near it and perfected it. It simply means that they have a good record of making their payments on time and that they maintain low credit balances. It also means that for one to have a good file, he or she should possess different types of credit, for instance, installment, mortgage, auto, and credit cards. Those who obtain scores of 850 also probably do not have any credit-related adverse information including late payments, collections, or bank-routable bankruptcies.
Altogether, we can state that the personal financial behavior of individuals with 850 credit scores is optimal in terms of credit utilization, payment history, credit age, and credit types. Being able to keep on maintaining such responsible credit usage for many years, someone’s score can slowly rise to 850.
Getting to 850: The Essence of Hard Work and Endurance
FICO – A credit scoring company – conducted a study on the consumers who got a “maximum” FICO score compiled in 2019. The research showed that credit scores often increase gradually to 850, taking years—on average 22 years—at which point, as long as one maintains perfect credit behavior.
The research established a prevalent and significant message when aspiring to attain an 850 score, which is that it takes discipline and time to create a credit file. There are no shortcuts. Those who scored 850 had an average credit history duration of 28 years, inclusive of all the Credits that they have obtained. They also had a high credit limit and low credit usage on their credit cards. Paradoxically, the broader credit range with personal loans or retail credit cards did not guarantee high scores. Holding credit accounts responsibly over many years was seen to be the most important element.
The Reality: Even though the increase is much more gradual than before, 850 Scores Are Still Extremely Rare.
The FICO study shows that indeed, it is possible to attain an 850 credit score, so long as one is persistent and has perfectly sound financial behavior for a long time. By the fourth quarter of the year 2022, only 1. 6% of the consumer population had a credit score of 848 and above as identified by FICO. According to VantageScore: only 0. 4 percent of consumers achieve a score of 850 under the new model.
Why does the 850 score remain a dream for many? First of all, it implies that there can be no mistakes in credit management at all. This means that even one mistake such as a delay or a high balance payment on a credit card can result in someone’s score never being ranked in the superior class. It is, therefore, challenging to have formed a solid credit history for decades and over a wide range of fields without having made any mistakes.
Recent credit scores also probably prevent more people from achieving 850 since many consumers do not have credit diversification. Making multiple accounts from loans and cards, such as credit cards, mortgages, and installment loans, lets the lenders prove that you are capable of managing any type of credit. However, some people do not even have a single line of credit in their entire lifetime, which means they cannot have a record-high score.
However, whereas a similarly low number of individuals can summit the 850 mountain, a growing number of consumers have achieved increased credit scores in recent years. To some extent, as people in the United States become more informed about credit building and overall financial understanding increases, McGuire and his peers anticipate that superior credit scores will continue to emerge as the norm.
Is the pursuit of such a high score worth it?
To many people out there, getting to 850 is just another pipe dream they will never achieve. Furthermore, it is not necessary to set such an extreme goal because the difference between the 850 scores is only small, as in reality. They mean that credit scores above 760 or 770 are already in the range that qualifies borrowers for the best credit, including low interest rates on loans.
If your goal is not something like the jumbo mortgages which need very high scores, there will be little added value to strive for 850 which will consume more of your time and energy. It is even more challenging to manage an already good credit score than having to build one from scratch through vigorous practice of credit discipline. However, the pursuit of the 850 dragon which would merely satisfy people’s bragging rights, may not yield the desired returns.
But for some of the discipline-oriented consumers, establishing the practice of constantly aiming for that perfect 10 percent is as much a competition in not slacking off from a strict financial regimen year after year. And of course, improving credit ratings does indeed promote beneficial credit practices that yield high returns over time.
Even though only a small number of individuals have the opportunity to be members of the 850 credit score club, it is still a relatively small group in the population. The fact that they have never made mistakes in using credit for over 20 years of credit usage and managing their credit obligations puts them in a category that is almost impossible to find when comparing them to other consumers. Therefore, even though credit scores in the highest tier might appear to be more of a fiction, there are people out there who have dedicated their time and effort to get up there. They just had to trek a long winding path to get there
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