Perfect Credit Score: What Is It and How to Get One

The perfect credit score may be rare to achieve, but it’s not impossible. Before we jump straight into what it takes to get the perfect credit score, we should take a short moment to cover some basic background information.

There are three major credit bureaus: Equifax, TransUnion, and Experian. Each of these credit bureaus uses the VantageScore modeling system to determine your score. However, each element has a different weight when determining your score. For example, although it will impact both scores, the percentage of credit used will have a different impact on your score in TransUnion than on Experian.

The FICO score is the most commonly used credit scoring model by lenders. It is not a credit bureau and does not store customer credit information. Instead, FICO uses all the information from your credit report, including scores from all three credit bureaus, to calculate your score. Monitoring your Equifax, TransUnion, and/or Experian credit scores will give you a good idea of where your FICO score will fall.

Why do I Need a High Credit Score?

Each credit bureau has its own scoring range from low to high. The higher your score, the better your credit. Consumers with higher credit scores can usually access new credit more easily and get better rates and terms.

In case you plan on borrowing money for a new car, buying a house, going on vacation, consolidating debt, opening a credit card, or any other reason, your credit will be pulled to determine the financial risk of lending to you.

Credit scores aren’t just for loans. Credit is also used to determine the risk of renting a home or apartment. Potential employers may even pull your credit information. Additionally, potential employers sometimes check your credit information to assess your reliability. Although they cannot see your score, they can see the factors contributing to it. Therefore, if you have a high credit score, the information that potential employers see will likely be positive, such as your payment history.

Is There Really Such a Thing as a Perfect Credit Score?

A good credit score can get you far, but a perfect credit score can result in lower interest rates and other perks. This perfect score does exist. You can have a credit score as high as 850, which will help you qualify for the best interest rates available.

What is the Perfect Credit Score?

Your FICO and VantageScore will fall somewhere between 300 and 850, with 300 being the lowest score possible. Excellent FICO scores range between 800 and 850, while excellent VantageScores fall between 750 and 850. So, if you’re reading your VantageScore as excellent, it doesn’t necessarily mean your FICO score will be.

The highest score you can achieve from VantageScore and FICO is 850. It’s the perfect credit score. The magic number that every bower strives to reach. Having and maintaining a high score means that you’re most likely to qualify for things like loans and credit cards based on your credit, and you’ll receive better loan and credit terms than those with lower scores.

However, it is critical to note that your credit score is not the only qualifying factor. Although your score plays a major role, lenders also use things like income and debt-to-income ratios to determine eligibility.

What Percentage of Americans Have the Perfect Credit Score?

A report from April 2023 announced a new high for the American average FICO score, stating that the average U.S. score has reached 718 – a significant change since “bottoming out at 686 in Oct. 2009.”

Only 1.7 percent of Americans have achieved the perfect credit score of 850. Although it is the highest you can hope to achieve, the perfect credit score isn’t necessarily a requirement for great credit or loan terms. A good score above 670 will generally provide you with a high enough score to qualify for the best terms.

How Long Does It Typically Take to Reach a Perfect Score

It will take multiple years to achieve a perfect credit score. You will build your credit as you get older and have more credit history. Different scoring models weigh credit history differently, but you will need multiple years of experience to maximize your credit score. Making good financial decisions can help you achieve a perfect credit score sooner.

Common Misconceptions about the Perfect Credit Score

A perfect credit score can give you access to better financial products, but it’s important to avoid believing in these misconceptions.

The Myth of Credit Card Cancellations

Closing a credit card is not going to hurt your credit score. Even if you cancel a credit card, your length of credit history will not decrease. While closing inactive credit cards can streamline your finances, those cards can still give you a better credit utilization ratio. However, the credit utilization ratio doesn’t matter as much if you always pay off your credit card debt at the end of each month.

Misunderstandings About Credit Mix and Age

You shouldn’t rush to take on multiple lines of credit just to increase the length of your credit history. You cannot accelerate your credit age by taking out more financial products. Opening multiple credit cards also isn’t the only way to improve your credit mix. The optimal approach involves a combination of installment loans and revolving lines of credit.

The Truth About Credit Repair Companies

Credit repair companies can only remove inaccurate information from your credit report. If your report does not contain inaccurate information, you won’t get anything out of this service. It’s better to focus on building your payment history than to rely on these companies. However, you can check in with them if you want to boost your credit within a short amount of time. They may be able to find something that is incorrect and file a dispute on your behalf.

How Can I Reach the Perfect Credit Score?

The 800 plus club is a term to describe those with credit whose scores reach and surpass 800. In other words, it is comprised of people with excellent credit, including those with perfect credit scores. Reaching that status requires a long-term commitment, but it’s possible if you stay sharp with your financial habits. There are several things you can do to get closer to a perfect credit score.

Develop a Good Credit Mix (But only if you’re sure you can afford it!)

Among these commonalities is the existence of debt. According to an article from Business Insider, “Those with excellent credit scores have an average of $126,306 in outstanding mortgage debt, $11,162 in auto-loan debt, $4,261 in student loan debt, $2,579 in personal loans, and $392 in unspecified debt…”

Most people with excellent credit have debt, and that’s because you can’t prove that you can manage debt without ever incurring any. You may notice another similarity in this information, and it’s called the credit mix. Obtaining different kinds of debt or having a good credit mix shows that you can manage different kinds of credit.

Consistent and Timely Bill Payments

Payment history is the most important component of building good credit. It makes up 35% of your total credit score. While making the minimum monthly payment will put you in good standing, it’s a good idea to pay off more of your debt. Never spending more than you can afford will make it easier to build your credit and end up with a perfect score.

Lowering Credit Utilization Ratio

Paying off your credit card debt at the end of each month isn’t only good for reinforcing good financial habits. This practice also reduces your credit utilization ratio, another core metric influencing your credit score.

Credit utilization measures how much you have borrowed against your limit as a percentage. For instance, if you have a $1,000 credit card balance and a $5,000 limit, you have a 20% credit utilization ratio. A credit utilization ratio below 30% can improve your score, but you should pay off your balance each month to get the maximum credit score boost.

While paying off your balance is a great way to reduce your utilization ratio, you can also request a higher credit limit. A $1,000 credit card balance with a $10,000 limit only results in a 10% utilization ratio instead of a 20% utilization ratio.

Maintaining a Long Credit History

Keeping your old accounts open will have a positive impact on your credit score. Your credit history makes up 15% of your total FICO score. You don’t have to do anything extra for this component to raise your credit score.

Consult a Credit Expert to Improve Your Score

Most of the credit building comes down to good habits. However, a credit expert can assess your credit profile and offer suggestions for improving your score. Some credit experts can review your credit report and help you find any errors. Disputing these errors with the major credit bureaus can get them removed from your report and result in a higher score.

Are you struggling to improve your credit score? Contact The Credit Pros today to speak with a credit specialist who can help you navigate the complexities of credit management. With their personalized solutions and expert guidance, you can learn how to effectively manage your credit accounts and achieve financial stability.

Call (727) 306-8201 or fill out a form to get started on improving your credit score with the help of The Credit Pros. With their 100% 90-day money-back guarantee and commitment to helping you succeed, you can trust that they have the expertise to assist you in reaching your financial goals.

The Bottom Line: Is a Perfect Credit Score Necessary

You don’t have to reach the perfect credit score for excellent credit and great terms. But it does provide that wow factor and a sense of security for those who have achieved it.

The pursuit of a perfect credit score can put you in a better position when it’s time to apply for new credit accounts and other financial products. A high credit score will help you save a lot of money, even if it isn’t perfect.

FAQs About Perfect Credit Score