If you are a perfectionist then at some point the idea of earning an 800+ credit score may find its way onto your “to do” list. FICO and VantageScore credit scores, the types of credit scores that are most widely used by lenders, have a range of 300-850. Therefore, earning a score of 800 or higher lands you firmly in the upper echelon of the credit scoring elite. It’s not likely you’ll earn an 800+ credit score by accident. Building credit scores of that caliber requires smart and consistent credit management habits.
Making Sure Credit Reports Stay Void of Derogatory Items
The single most important way that you can earn and maintain great credit scores is to make sure your credit reports remain clear of derogatory information such as (but not limited to) late payments, collection accounts, bankruptcies, tax liens, past due balances, judgments and anything else that suggests you’re not paying your bills on time. Your payment history accounts for ~1/3rd of the points in your credit scores. If you’re not banking nearly all of them then you won’t get close to 800.
To improve your score, pay down your balances and keep your average account balance at or under 30%-35% of your total available credit line.
Minding Credit Card Balances
On time payments and clean credit reports are great; however, those actions alone still will not likely be enough to help you reach your goal of credit score excellence. Credit scores pay a lot of attention to the balances of the accounts on your credit reports, especially your credit card balances, and the relationship of those balances to your credit limits. This relationship between credit card balances and limits is known as your “revolving utilization ratio.”
As your credit card balances climb your revolving utilization ratios will climb as well. Unfortunately, climbing revolving utilization will cause your credit scores to head in a downward direction. If you wish to earn and maintain elite scores then you must use a very modest percentage of your credit limits and do your best to pay off your credit card balances every month. Shoot for a a percentage below 10 and you’ll be fine.
Making Sure Credit Files Are Not Too Thin
It is impossible to build elite credit scores unless you have a sufficient number of accounts appearing on your credit reports. Again, there is no magic number of accounts that scoring systems want but it is safe to assume that three accounts or fewer is considered a thin credit file and that file is not likely to earn an 800 credit score. As your credit files bulk up over time your scores will reward you.
Being Prepared to Wait
It is no secret that scoring systems reward those with older credit histories. The age of your oldest account and the average age of accounts on your credit reports both wield a significant amount of influence. The older, the better.