What Is the Highest Possible Credit Score?
Striving for the highest possible credit score is a noble effort, but is it truly necessary?
Contributing Writer at Tally
January 19, 2022
Having good credit opens a world of possibilities, including homeownership, the ability to finance a car and the financial flexibility having a credit card offers. If good credit opens those possibilities, then having the highest possible credit score must open even more financial doors.
This is true, but with so many credit scoring models out there, what is the highest possible credit score you should aim for and how do you attain it? We'll cover this, whether or not the highest credit score is essential and more below.
What's the highest possible credit score?
Ninety percent of all U.S. lenders use FICO® scores when determining creditworthiness, making it the most common scoring model. And the FICO 8 scoring model is the most popular among the FICO scores.
The FICO 8 scoring model has a credit score range of 300 to 850, making an 850 credit score the highest you can attain.
Is an 850 credit score attainable and beneficial?
An 850 credit score — a virtually perfect credit score — is indeed attainable. In fact, a 2019 Experian survey found 1.2% of Americans had an 850 FICO score, and that percentage increased to 1.6% in 2021. However, with the natural ebb and flow of credit scoring and the reporting differences between the three major credit bureaus, maintaining this high credit score at all times would be difficult, if not impossible.
Fortunately, a perfect credit score isn't required to get the best interest rates and financing terms. Generally, lenders make no distinction between a borrower with a score of 800 and one with a score of 850. Plus, in most cases, a 760 credit score is plenty to earn you the best interest rates and terms on all types of credit, including credit cards, personal loans, car loans and more, according to Experian.
So while that 850 credit score is definitely a laudable achievement, you should receive the same treatment from credit card companies and lenders if your FICO credit score lands anywhere between 760 and 850.
Can you attain an 850 credit score with bad credit or no credit?
If you had a late payment or other negative information added to your credit report, you may think that a perfect credit score is unattainable. Luckily, credit is self-healing with time and some effort on your end.
Most negative information on your credit history remains there for seven years, but Chapter 7 bankruptcy is an exception at up to 10 years. So if all you had was a late payment or collections account, you could attain that 850 credit score by maintaining good credit habits and waiting for that seven- to 10-year clock to run out.
Suppose your credit score is less than 850 because of an issue you can control, such as credit utilization ratios (your credit card balances relative to credit limits) or credit mix (your mixture of revolving and installment credit). In that case, you may be able to reach that perfect score even earlier by lowering your debt or getting a better mix of revolving and installment debt.
If you’ve never used credit or just haven’t used it in many years, chances are you have no credit score at all. In this case, building an 850 credit score is possible by managing the FICO Score variables you can control and waiting for your score to increase over time.
What can help you reach an 850 credit score?
While it's unnecessary to reach an 850 credit score to get the best terms when opening new credit accounts, there's nothing wrong with striving for it. These tips can help you work toward building a higher score and possibly reach the highest credit score possible.
Maintain your payment history
Your payment history makes up 35% of your credit score, making it the most impactful variable. Maintaining a perfect payment history is paramount in reaching an excellent credit score. Just one 30-day late payment can send your FICO score tumbling up to 100 points, making it an uphill battle to reach the highest possible credit score.
To achieve this, you may want to set up automatic payments on your due date for at least your minimum monthly payment. If you prefer to pay extra, you can always make a second payment for that amount.
Get your credit utilization in check
Amounts owed makes up the next largest chunk of your credit score at 30%, and your credit utilization ratio is a significant piece of this puzzle. By paying your credit cards and lines of credit down to below a 30% credit utilization rate, you can boost your credit score.
Using the debt avalanche or debt snowball method, you can pay off your credit card debt as quickly as possible without straining your monthly budget. Once you get a low credit utilization rate, you may start seeing your credit score tick upward.
Avoid opening more credit
Opening new credit hurts your credit score in multiple ways and can slow your journey to the highest possible credit score. First, when you apply for new credit, the lender or credit card company will perform a hard credit inquiry, which can negatively impact your credit score for 12 months.
Plus, it adds a new credit account, negatively impacting your new credit variable. Fortunately, this only accounts for 10% of your FICO score, so the impact is small.
Finally, adding a new account can shorten your length of credit history variable, which can also lower your credit score. Plus, this impact can be long lasting, as you must play the waiting game as this new account ages.
What are the benefits of having an 850 credit score?
You'll enjoy a range of benefits when you attain an 850 credit score. In fact, as stated above, many of these perks begin once you reach a 760 score. Here are some of the best perks.
Access to the best credit cards
A good credit score not only gets you the best interest rates on your credit cards, but it also opens you up to some of the best credit cards in the industry. These cards will have superior rewards, great perks and other benefits normal credit card issuers don't offer.
You can also get access to special offers, including 0% balance transfer credit cards or low-APR introductory offers, like 1.9% for 18 months.
Access to special loans
You may see advertisements for car loans at 0% interest or low-interest mortgages. While these look great, lenders often limit these to folks with top-tier credit ratings. You will qualify for these special offers with the highest possible credit score.
Lower insurance rates
Some car insurance companies base a portion of your premiums on your credit rating. You have a better chance of getting the lowest possible car insurance premiums with the highest possible credit score.
Easier to find suitable rental property
Most landlords will perform a credit check on a potential tenant to verify they make all their debt payments on time. If you have the highest possible credit score, you open your options to just about any rental property in your budget. Plus, that high credit score may put you above an applicant with just an average credit score.
Perfection is great but not necessary
Striving for that perfect 850 credit score is an admirable goal, but it's not absolutely necessary. As mentioned above, most creditors lump everyone with an 800 credit score or above into the same tier and treat them the same way when issuing credit. Plus, a 760 credit score is enough to get you in this top tier in many cases.
Fortunately, this top-tier credit score range is attainable for anyone, even if you currently have bad credit or no credit at all. It just takes time, dedication and sound financial decisions to reach it.
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