Your 850 credit score falls in the range of 800 to 850 scores. This is when your FICO score is high above the average credit score.
You can still improve it a bit and attain a higher score. But, lenders are not likely to see any significant difference between your score and those closer to 850. The latest statistics show that 21% of all consumers have an exceptional credit score of 850.
Perhaps you may wonder how to get an 850 credit score. If you wish to improve your credit score, you can do simple things. It may take you time, but it’s worth it in the long run.
Some of the things you may have to do are:
- Start by reviewing your credit reports and find out why your score is low.
- Try as much as you can to pay your revolving credit. This will help reduce the percentage of your credit utilization.
- Do your best to ensure the removal of charge-offs from your credit (especially late payments).
- Find a close friend or relative to add you as an authorized credit card user. They do this by adding you to an old account with excellent payment history. The account should have a low utility rate. And, they shouldn’t even give you their card.
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Why Should You Desire an Exceptional FICO Score?
With an 850 credit score, you’re likely to get easier approvals anytime you apply for new credit or a loan. In fact, an 850 FICO score is considered almost perfect. It’s a sign of the nearly-flawless credit management. This is whereby your chances of defaulting on bills are considered very low.
Thus, lenders are likely to offer you the best deals. Such include the lowest possible interest rates on your loans. More so, you can expect credit card issuers to give you their most luxurious reward cards and loyalty programs.
Lenders know that late payments of 30 days plus are rare among those with exceptional credit scores. Such individuals appear on 0% of their credit reports. And these are the people with 850 credit scores.
Besides, an exceptional credit score may imply an opportunity to refinance your older loan. And you get the chance to do so at better interest rates. Again, you have excellent odds for the approval of:
- Auto loans,
- Premium credit cards, and
- Mortgages.
What Factors Contribute to the 850 Credit Score?
You need to understand that an 850 credit score is an achievement developed over time. It requires discipline and consistency to attain such an exceptional credit score.
Whether intentionally or instinctively, you’re doing an excellent job considering the factors that help you maintain the 850 credit score.
Without discipline, your credit issues may worsen, and your score drops. If your score is already negative and you’re wondering how to find your way up, there’s hope.
The good news is that cheap credit repair services can save your situation. The mission of the credit repair companies is to help you find credit report errors that are affecting your credit scores extensively. They will review your credit report. And, they’ll also work towards removing any negative information.
The credit repair company will then contact your creditors and negotiate settlements. They can also dispute any inaccuracies with your credit. They afterward ensure that the inaccurate credit details are erased.
Thus, your account ends up updated with positive details. So, with cheap credit repair services, you can fix many issues. Over time, you get to have an increased credit score. And, you may quickly achieve the exceptional 850 credit score.
So, what are these factors contribute to the 850 credit score?
- Usage Rate on Revolving Credit
Usage or utilization rate measures how close you are to exhausting your credit card amount.
You can take complete control of your finance using Chunk finance since they give you key insights into your spending. This data will let you know if you are about to exhaust your credit thereby lowering your credit scores.
You can calculate your usage rate for each of your credit card accounts. You achieve this by dividing the indicated balance by your card’s borrowing limit. And then multiply by 100 to get the percentage rate.
You can also determine your total utilization rate by dividing the full amount of all your card balances. You divide by the sum of all the spending limits. This includes the limits on the cards but with no outstanding balances.
To keep up a healthy credit score, you must maintain a low credit utilization rate (CUR).
The rule here is that you shouldn’t let your CUR exceed 30%.
Some experts suggest that you aim to keep your credit utilization rate at 10% or lower. This is if you desire an excellent credit score. They term this as a healthy goal to attain the best credit score.
So, allowing the usage rate to go higher will only harm your score. The utilization rate is responsible for almost one-third of your credit score. This is equivalent to 30%.
- Timely Payments
No factor contributes significantly to your credit score, like prompt payments. If you keep missing or making late payments, it will negatively affect your credit history. And it will be hard to attain the exceptional 850 credit score.
Besides, the length of credit history contributes up to 15% of your credit score. All the other score factors can remain constant. And still, a more extended credit history will produce a higher credit score than a shorter length.
Note that new credit accounts and credit applications have short-term negative impacts on your credit score. The credit-scoring system points you out whenever you apply for new credit or take an extra debt. It flags you as being at higher risk of not paying your bills on time.
When this happens, your credit score drops little by little. But, as you keep up with your payments, it automatically rebounds within several months.
- Payment History
Good payment history is a perfect place to start your journey towards an 850 FICO score.
In your payment history section, a scoring model may ask you the following questions:
- Do you have any late payments on your credit report?
If your answer is yes, other questions may include:
- What was the extent of late payment (30, 45, 60 days, etc.)?
- When did the late payments happen?
- How many late payments do you have on the report?
A one-time 30-day late payment alone can destroy your credit score. It doesn’t matter even if the entire report is in good shape. Still, you can expect some damages. And, if you have several late payments or extreme late payments (60 days late or more), your scores might hit harder.
In such cases, it can take you longer to repair your credit. Thus, attaining the outstanding 850 credit score might be more challenging.
However, you can involve a trusted credit repair service to intervene in your situation. Other payment-based details that could harm your credit score include:
- Bankruptcies
- Charge-offs
- Collection accounts
- Repossessions
- Foreclosures
Fortunately, there’s still hope; credit scores do reverse for better. This is as long as you start making your payments as you should. By avoiding negative payment history, the impact of your old unfavorable credit mistakes will shrink step by step.
Conclusion
An excellent credit score is a key that will unlock many benefits. You’ll access better rates on your auto loans, mortgages, and all that involves financing.
Furthermore, when you have a better credit rating, you’re considered a lower-risk borrower with most banks. So, you also get loans with lower fees. Thus, a good credit score of 850 tells lenders that you’re a low-risk borrower.
This means that you are highly likely to pay your debts promptly and in full. And, lenders are looking to reserve their lowest interest loans for those with the lowest risks. Therefore, it’s beneficial to work towards the perfect credit score of 850.
It shows that you’re one of the most credit-worthy people. And you’ll be considered highly by lenders for the best credit and loan terms.
