It is very hard to get an 850 credit score, which is why almost no one can get it. Out of all consumers with a credit report in the United States, only 0.6% of these consumers have an 850 credit score. But what are the steps to climb up this credit score roof and why are there so few climbers? Perhaps, it is necessary to focus on its components closer.
What Needs to Be Done For An 850 Credit Score
Credit scores are on a scale of 300 to 850. This range is important for evaluating credit risk and the ability to repay loans of a particular client. The most commonly used credit scoring model is FICO, with the following score ranges:The most commonly used credit scoring model is FICO, with the following score ranges:
800-850 = Exceptional
740-799 = Very Good
670-739 = Good
580-669 = Fair
300-579 = Poor
Thus, an 850 FICO score is the maximum credit score possible under this credit rating system. They can point to excellent credit management and discipline to any lender or credit card company.
Entry Requirements For An 850 Credit Score
Achieving this near perfect 850 credit score is very arduous. Why? That’s why long-term credit usage and payments are expected to be perfect, and it is hardly possible to achieve in the majority of cases. Generally, you need:
- Late payments on this account have never been made
- No credit inquiries have been made in the past 12 months
- Credit history which has a history of over 10+ years
- Credit card, loan, and debt are good not to exceed 30% of the credit limit
- Various types of credits such as installment credits and revolving credits.
Therefore, to sustain an 850 credit score one never made a bad credit mistake in their lifetime, has a variety of credit accounts active for several years, keeps card balances very low and does not apply for credit too frequently. It is the credit profile of the most prudent consumer in terms of fiscal policy as is possible. It is estimated that many people think that it is almost impossible to achieve.
How Many People Have a Credit Score of 850?
New data from FICO reveals that only one percent of consumers with credit scores have FICO score of 850. This can be translated to about two million people who have a perfect credit score in the United States. The number of people with a credit score above 800 is significantly higher, exceeding 38 million in the United States as of 2022. This means that individuals having a score of 850 are in an elite class of individuals who rarely exist.
Credit score in US stands at an average of 716. Hence, the number of people with an 850 score in the total US population is significantly less than 1% if those who have no credit history are considered. All in all, only a fraction of a percentage of the total population of the United States of America has pristine 850 credit.
Why Is It So Rare?
Obtaining that 850 score is extremely elusive for several reasons:Obtaining that 850 score is extremely elusive for several reasons:
1. Length: Years in credit history must be many, decades or more – Applicants younger than 30 cannot qualify because they have brief credit histories. It is quite unlikely that the majority of people under 30 will qualify for a high score due to age-related considerations.
2. It requires perfect payment behavior in the long term – 99% of people are going to miss or be late on a payment at some point in the financial life or they will need to challenge a charge/rating. This prevents scoring 850.
3. High scores thus take a blow during an economic crisis – It is not impossible to see otherwise pristine scores being affected by a recession or financial difficulty. These macro factors make maintaining that top tier score for decades impossible for most, let alone becoming a reality.
4. Applying for credit impacts scores – Getting credit and seeking credit can hurt the much needed 850, one has to be very careful and protective of their 850. Each application may reduce your score points for a while.
The fact is that the necessity to make mistakes and to have some unexpected events in one’s life makes it virtually impossible to maintain an absolutely impeccable credit record and flawless behaviour during 20+ years with the balances remaining negligible. That is why the 850 distinction remains out of reach for almost everyone.
The Takeaway
Despite the fact that the concept of an 850 credit score is not something very concrete, it does signify that you can get into the best of the brackets and be able to secure the lowest of the rates and other charges from any lender you choose if you have any borrowing requirements in the future. However, only 0.2 percent of consumers scored 95 or higher, which is what marketers refer to as the ‘ideal’ score. A more achievable goal for most people is to aim for a score that will be over 700 to get a Very Good mark to be able to qualify for better rates. Even if you want to maintain a perfect credit score and you don’t have to take a new credit or loan in your life, still that 850 score will always be beyond your reach.
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