When it comes to achievements in the credit-score world, nothing earns you more bragging rights (or better interest rates) than breaking the 800 mark. But getting there takes time, effort and a steady commitment to a specific type of fiscal responsibility.
“Getting above 800 is an entirely different threshold when it comes to credit scores. And so few people are up there that banks don’t even talk about it that much because it’s so unusual,” says North Shore Advisory President and FICO Certified Professional Tracy Becker. “People who are obsessed with cracking the ceiling of 800 tend to be overachievers and strive for the best in everything, and there’s a pattern to how they tend to manage their credit and finances.”
On average, nationwide credit scores have been climbing. According to data from FICO, the average U.S. score is 695. Still, only about 19 percent of the consumer population falls between 800 and 850.
If you’ve already got a sweet score in the mid-to-high 700s and want to join the ranks of the 800-plus club, these tips will help you breach that enviable barrier.
Length of credit history (be patient)
One of the most important factors in credit score algorithms is the length of one’s credit history, according to Becker. It accounts for 15 percent of your FICO score, and that’s because lenders value an extended period of responsible financial behavior when assessing your creditworthiness. So unless you’ve got several years of borrowing (and timely paying) under your belt, don’t get your hopes up for 800 just yet.
“People with an 800 score typically have a pretty old credit history, usually more than 20 years’ worth,” says Becker. “An 800 is going to be a lot harder for someone with just five or 10 years of credit.”
If your credit score is strong but relatively young, Becker suggests asking someone with a more seasoned credit history—a parent or grandparent, perhaps—to add you as an authorized user on one of their oldest cards.
“If mom is 70 and adds you to a card that’s been open for 30 years, that will show up on your credit report within three months and extend the average age of your of your history,” says Becker. “It could boost your score by about 20 points.”
Some 20-somethings do get to 800 – see how some of them did it.
Credit mix (diversify your accounts)
Almost all 800-plus consumers share an important attribute—their credit reports include more than just a credit card or two.
“You need to spread yourself out amongst a bunch of different accounts,” says Heather Battison, vice president of communications for TransUnion. “Just having a bunch of credit cards is different than having a lot of different types of accounts that show your credit behavior.”
According to Battison, the ideal credit mix includes three to five credit cards in addition to installment accounts, such as student loans, car loans or mortgages. This doesn’t mean you should run out and buy a new car, expecting your score to skyrocket, Battison cautions. It simply means that working toward 800 will require a diverse borrowing portfolio amassed over time.
“Certain types of credit make more of an impact than others,” says Leslie Tayne, financial attorney and author of “Life & Debt.” “For example, a credit card with a $500 limit will not have the same impact as a car loan that you have been paying for 18 months.”
For younger consumers who don’t own a home and have minimal lines of credit, Battison suggests this tip.
“If you’re a young millennial who’s renting, go to your landlord and ask him to report your monthly payments to the credit bureaus,” says Battison. “This will help add variety to your overall credit report and boost your score—provided you pay your rent on time.”
The reporting of rental data is relatively new, however, and not all credit scores incorporate it. Read more here.
Payment activity (use your cards)
Don’t let cards languish in the recesses of your wallet or purse, Becker says. Inactive cards may be closed for lack of use, meaning you’ll lose their credit limits. If you have high balances on other cards, your credit utilization could then increase, damaging your score.
This doesn’t mean you should make frivolous purchases on your cards for the sake of usage. Instead, use your variety of cards to make small, regular, necessary purchases — things like food and gas.
“People need to realistically assess their situation and what they can handle,” says Mike Catanese, vice president of data management and analytics for Equifax. “Getting a really good credit score is a reflection of the fact that you operate within your means. You can’t control what the scoring model does, you can only control the behaviors that drive it.”
Number of inquiries (be careful about closing and opening cards)
Closing old cards and opening new cards reduces your average age of accounts (a factor in credit score) — with the added downside of dinging your score for a hard inquiry. So if you’re hovering around 750 or 760, think carefully about opening and closing accounts.
Closing an account won’t immediately lower your length of credit history, as cards closed in good standing remain on your credit reports for 10 years. But, if your oldest card is much older than the second-oldest, you could get dinged 10 years down the road, especially if you’ve opened a lot of newer accounts.
“Closing an unused or inactive card can negatively impact your score, especially if it’s your oldest account on record,” says Battison. “Those cards are helping your length of credit history, even if you’re not using them.”
Becker recalls a personal anecdote.
When she got her first mortgage, her score was 820. Shortly after buying her home she applied for a Bloomingdales credit card. She was approved, of course, but her score dropped to 740—and it took four years to get it back to 800.
“Be aware that the better your credit is the more every little thing is going to affect it,” says Becker.
If your credit is below the mid-700s, be especially careful about wasting an inquiry on a card you won’t qualify for. Before applying, use a soft-pull credit-qualification tool to see which cards are most likely to approve you.
Payment history (always avoid late payments)
Those with higher credit scores are penalized more severely for even small infractions compared to those with mid-range or low scores. This means avoiding late payments—which is of the utmost importance in general—is critical for those aiming for 800.
“If you have a 780 score and have one late credit card or mortgage payment, you’re going to drop down to around 650,” says Becker. “But if someone has a 550, the same late payment will only bring them down 10 or 20 points.”
At the end of the day, Catanese says, those aspiring to 800 should continue focusing on the behaviors that have already gotten them within arm’s reach of that enviable number.
“It’s nice to have a great credit score, but it’s much worse to have a bad credit score. More doors close on the low end than open on the high end,” says Catanese. “If you’re already at 750 that means you aren’t missing payments and you aren’t carrying balances. So continue doing what you’re doing—just do it for even longer.”
800+ credit score – in context
Here’s what various score ranges mean (based on definitions from Experian regarding FICO scores):
800 credit score – what it means
|800+||Excellent||Consumers in this range can expect easy approval for credit products and the best terms.|
|740-799||Very good||Consumers in this range can expect to qualify for a wide range of products and are eligible to receive favorable terms.|
|670-739||Good||Consumers in this range may vary in their qualification for credit products. Those at the lower end may get denied for premium products, or may have less-favorable terms/lower credit limits. Still, getting approved for a card or loan is absolutely feasible.|
|580-669||Fair||Consumers in this range can expect higher interest rates and may not qualify for some credit products. Results will vary, based on whether the score is due to thin credit history or a troubled one (bankruptcies and late payments).|
|579 and lower||Poor||Consumers in this range will have trouble qualifying for most credit products.|
Updated June 2017