800 credit points: How to get there

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If you want a credit score well above average, aim for a credit score of 800. Although this rating is not the highest possible credit rating, it will place you within the highest credit rating range available to the FICO credit rating model. Borrowers within this credit score range generally pose minimal risk to lenders.

Therefore, you may have a better chance of getting the best terms, such as B. The lowest interest rate you can get if the lender approves you. Advisors will teach you what it means to have a credit score of 800, how to get there, and the benefits that come with it.

What does an 800 credit score mean?

If your credit score is 800, your credit score is better than a good credit score. This is an excellent or excellent credit rating according to the most popular VantageScore and FICO credit rating models. As of April 2018, only 21.8% of Americans had a score of at least 800, according to the FICO report.

To get such a high score, you need to manage your credit score well. This means you may have a long credit history, a perfect payment history, a good credit portfolio, and only use a small percentage of your total credit limit. Based on your good credit history and good lending habits, lenders will see you as less likely to default on your loan than applicants with lower credit scores.

How to get an 800 credit score

While there’s no guarantee your score will reach 800, applying these tips can help you improve your score.

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1. Build or rebuild your credit history

Since your credit history is 15% of your credit score, a negative, little or no credit history will prevent you from getting an 800 credit score. To fix this, focus on building your credit. You can do this by applying for a home loan or applying for your first credit card.

A credit builder loan is a personal loan designed to help you add a positive payment history to your credit report. Unlike traditional personal loans, lenders do not transfer any amount directly into your account. Instead, it puts the money into a savings account or certificate of deposit (CD), which you can use after the loan has been repaid.

Using your credit card responsibly is another way to build your credit history. If you don’t qualify or don’t want to use a traditional credit card, you can apply for a secured credit card. When you withdraw your secured card, you will be required to make a cash deposit, which will be placed into a secured account equal to your credit limit.

2. Pay your bills on time

Your payment history is the most important credit factor – it accounts for 35% of your FICO score. Therefore, your goal should be to not miss any payments. If your bill is 30 days past due, your creditor can report it to the credit bureau. Once your credit report lists late payments, it can do serious damage to your credit score. To avoid late bill payments, use a spreadsheet to track your due dates or sign up for automatic payments.

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According to FICO, most people with 800 points or more cash out their balance in full each month.

3. Keep credit usage low

The second most important credit rating factor behind payment history is your credit utilization rate – it accounts for 30% of your credit score. Your credit utilization measures the amount of credit you use compared to your total credit limit. If your total credit limit is $10,000, you should not use more than 30% – $3,000. To improve your credit score, keep your ratio as close to 0% as possible.

4. Check your credit history and credit report

To track your progress, monitor your credit score and credit report. You can check your credit score for free with a free credit score website. Some of these sites will even give you advice on improving your credit score.

Since your credit scores are based on the information listed on your credit report, check them to make sure they don’t contain inaccurate negative information, such as late payments or collection accounts. Even if you pay your bills on time, credit report errors can still happen. Until April 20, 2022, you can view all three reports weekly for free by visiting AnnualCreditReport.com.

If you find an error listed in one of the reports, file a complaint with any credit bureau that lists the error to have it removed.

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Benefits of an 800 Credit Score

A credit score of at least 800 brings several benefits, including easier loan approval, lower interest rates, better credit card deals, and lower insurance premiums.

Better chance of getting approved for credit

When applying for a mortgage, personal loan, or personal student loan, you don’t have to worry about meeting the 800 lender’s minimum credit requirement. Lenders may approve your application as long as you meet other loan requirements such as income and debt.

Lower interest rates

A credit score of 800 will usually give you the best interest rate if you are approved for a loan. For example, you may qualify for 0% new car financing or lower mortgage or personal loan interest rates. This can save you thousands of dollars in interest over your lifetime.

Better credit card deals

High-quality borrowers with a credit score of at least 800 qualify for the Best 0% APR Credit Card. Transfers and purchases on these cards are interest-free for up to 21 months. You can avoid paying interest as long as you pay off the balance in full by the end of the promotional period.

Plus, you might qualify for some of the best travel credit cards. Some of these cards offer great travel bonuses after you meet the minimum spending requirements.

Lower insurance premiums

When you apply for insurance, some insurance companies take your credit rating into account when calculating your premium. If you live in a state that allows credit-based insurance, you can get an 800 credit score discount for homeowners or auto insurance premiums.

For example, according to a car insurance study by The Zebra, you can save more than $1,500 on car insurance if you have good credit rather than bad credit (below 580).

How to maintain an 800 credit score

Once your credit score reaches 800, your work is far from over. Your credit score isn’t set in stone — it fluctuates based on the factors discussed above. If you want to keep your score within the highest possible credit range, you must continue to develop good credit habits. That means constantly monitoring your credit score and reports, keeping your credit utilization low, and paying your bills on time.