The perfect credit score of 800 is the ultimate goal of most consumers However, because credit scoring is not easy and it depends on several factors getting this kind of score is next to impossible and very challenging Fico states that only 1 percent of consumers have credit scores of 850 or above This is why maintaining a perfect or almost perfect credit score is not a walk in the park and it takes a lot of hard work and discipline
In simple terms, an 800 credit score signifies that an individual is financially responsible and capable of handling his or her financial obligations in the best way possible.
Two major companies operate in the United States to calculate credit scores FICO and Vantage Score FICO scores that are widely used by lenders range from 300 to 850 Anything that is above 800 is regarded as very good.
An 800 plus credit score indicates a very good credit history They meet all their payment obligations without any delay and have a low utilization rate of their credit card balances, low credit utilization ratio, low credit-to-income ratio, and multiple accounts with a long credit history This makes the creditors to perceive the 800 credit score holders as low risks and very likely to repay their loans.
Why is It Almost Impossible to Achieve a Credit Score of 800?
It is challenging to get to an 800 credit score for the following reasons
Length of Credit History – FICO scores take into account the average age of all your credit accounts The longest have to be kept open and active for many years this helps to improve your scores If you have short-term credit accounts it will go against you
Outstanding Debt – Holding any balances or debts for long reduces credit scores regardless of timely payments The closer to zero balances or debts, the better.
Credit inquiries – Any time one applies for new credit, it results in a hard inquiry in their credit file Excessive inquiries will slightly reduce scores, meaning new credit needs to be restricted
Credit Card Utilization – High balances as compared to total credit limits or maxing out cards are bad for scores According to experts do not let each card go above 30% utilization.
Payment history – even one late payment can ruin a previously good credit history; missing a payment cannot be done even once.
Credit utilization – Lenders prefer to see the proper management of credit such as credit cards, mortgages, and installment credits.
Getting to 800 is all about building credit just as much as it is about rebuilding credit over the years.
The idea of obtaining a credit score of 800 is quite impossible to achieve without proper utilization of credit and timely payment for many years Therefore, years of proper credit utilization contribute to achieving this high score Some of the suggestions include
- It is therefore advised to apply for a credit card or loan when young for instance when in college to build a good credit history.
- Always pay all the debts and build perfect and unblemished credit histories
- Maintain credit cards for many years to build up receivables
- Reduce the number of credit inquiries by applying only when it is unavoidable
- Credit card costs should be paid in full to ensure that balances remain small at all times.
- Lease cars and homes to bring in diverse installment repayments such as installment payments.
- Keep credit reports updated and correct any wrong information with the credit bureaus.
Achieving 800 is not easy but it’s possible through a lot of discipline; the returns are however visible for the borrower once there gets to be an 800 credit score Only individuals with the best credit scores secure the best interest rates and repayment terms that may seem cheap into the long-run The journey is long but once one gets to secure an 800 credit score, it is like getting into a secret financial club where loans are going to be cheaper
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