So, is 800 considered an excellent credit score? Well according to 2011 data from FICO, 18.3% of consumers have FICO scores between 800 and 850. So, while the 800-and-over club is exclusive, it’s not unattainable. But how do you get there?
If you’re curious about how to achieve an 800 credit score, you should go straight to the source.
- MyFICO.com – This is Fair Isaac and Company’s (FICO) site for consumers. Yes, the site actively markets FICO’s credit monitoring service, but there’s a great deal of free information in the education and community sections of their site.
- Members of the 800 club – Know someone with a FICO score in this range? Ask them about the types of accounts they have, their credit utilization, payment history and more. Want someone to start with? Well in a recent post, I wrote about my credit score of 790, which you may find useful (used to be 800 before some recent credit inquiries were made).
Does that sound like more effort than it’s worth? OK, here’s a cheat sheet for you…
If you don’t want to spend all your waking hours scouring the MyFICO site, poring over forum posts and interviewing those who already have a high score, I’ve created the following cheat sheet just for you.
This information is derived from the clues that MyFICO gives about so called “high achievers” (those with a score between 760 and 850) as well as my own experience and knowledge.
1. Age of your accounts
Unfortunately, this is one of the few things that is difficult to control in the near term. Just like you can’t accelerate the aging of a fine wine, you can’t speed up the clock on the age of your credit account.
The oldest revolving account (translation: credit card) for the high achievers is pegged at 19 years on average. Furthermore, the average age across all their accounts is between six and 12 years. The age of your accounts is important because lenders like to see you’ve been handling credit responsibly over a long period of time.
What does this mean? Age discrimination that’s 100 percent legal! Even though I first hit 800 in my mid-20s, that is extremely rare and many people may not hit that number until their 30s or 40s.
So think twice before you cancel your oldest card. For many of us it’s the one we got in college. It probably has a high interest rate, no rewards and a low credit limit – a prime candidate for the shredder. But consider sockdrawering it instead and maybe use it once a year to keep maintain its active status with the bank. If your oldest card has an annual fee, though, and not enough benefits to justify it, don’t pay to keep it around. Instead, open cards that serve you and will grow with you. Eventually, their long history will bolster your average age of accounts.
2. Bad debt
Collection or public record on your file? On MyFICO it says that “virtually no” high achievers will have that. So even if you do everything else right, don’t think you can get away with having that one ER bill charged off or that old credit card from five years ago in collections.
If you already have charged-off accounts on your report, you’ll need to let time do its work. Charge-offs will fall off your credit reports after seven years.
3. Number of accounts
According to a post by a MyFICO moderator, six accounts currently being paid as agreed is the average for high achievers. Moreover, high achievers have an average of four to five credit cards on file (which includes accounts both currently open and those that have been closed but are still on the report). Just a little FYI though — I have many, MANY times more cards than that!
Having more accounts than you can manage isn’t a good idea. However, when used responsibly, they can be quite helpful for your credit score.
4. Mix of credit
Credit mix accounts for a relatively small piece of the FICO pie — but it can push you into FICO’s upper echelons. In general, you’ll need to following to maximize the “credit mix” portion of your FICO score:
- Revolving accounts – This is primarily credit cards
- Installment accounts – Loans where you pay a fixed amount each month. Think mortgage, car loan, etc.
Those are the two main categories and then within each, there are also variations which can affect your creditworthiness. For example, TransUnion considers a bankcard with a credit line of $10,000+ as being a “premium bankcard account.”
Since FICO’s formula is proprietary, no one knows exactly how they measure or weight the importance of a given credit limit of something like a “premium bankcard account.” We also don’t recommend getting a loan for the sake of increasing your credit variety. Instead, let it happen naturally (when you need a new car for example), pay those loans on time and reap the benefits.
5. Payment history
Depending on the source you reference, having even just one 30-day late payment reportedly may knock down your score by up to 60-120 points (the higher your score is, the greater the fall).
That being said, even though creditors have the right to report all non-paid accounts as late the day after the due date, that is extremely rare. Many won’t report it as late unless it’s not received by the next due date. Just don’t bet the ranch on that because every lender operates differently (so be safe and pay on time).
6. Credit inquires
Every time you apply for some form of credit, whether it be a credit card, mortgage or loan, a “hard” credit inquiry is made. This hard inquiry is recorded on your credit report. It stays on there for 24 months but will only be able to affect your score for the first 12 months (with the greatest impact during the first 6).
The MyFICO moderator posted that for the high achievers category, 72% didn’t apply for credit in the past year. Still, you can most definitely have an 800+ score even with inquiries affecting it. You just don’t want to have too many. From my experience anything beyond 3 per year is a no-no if you want to keep your score above 800 (mine dropped to 790 from having that).
Last but not least, we come to credit utilization – the percentage of a credit limit which is being used. It has been a hotly debated topic at CreditCardForum on multiple occasions.
Keeping your utilization below 30 percent of your credit limit is often recommended as the standard safe zone. Yet, if you want your score to go higher, bring your utilization lower. All else being equal, those with 10 percent utilization can expect higher scores than those at 30 percent.
One last important note – credit scores are not created equal!
Other scores (including those offered on free credit-tracking sites) may imitate FICO, but are drastically different. While these scores can be a good way to monitor your progress, lenders are more likely to pull your FICO than anything else. So make sure you know your real FICO number before you apply for a major loan.
Best cards for beefing up your report?
Below are some cards with a reputation for giving respectable credit limits, which makes it easier to keep your utilization low.
I got to almost an 800 FICO score in my early 20’s using just cards alone (I had about 10).
Updated April 9, 2015