Q: Dear CreditCardGuru, I thought the credit score range only went as high as 850 but when I recently checked mine score on Experian, it showed it as 857?! Now I’m completely confused. What is the highest credit score attainable?
A: You are correct in that the highest credit score possible is 850 for FICO and the newest version of the Vantage Score. However, an older version of the VantageScore goes all the way up to 990. Here’s what you need to know about them.
Fair Isaac Corporation developed the FICO score 27 years ago (1987). Since that time, it has definitely been the gold standard for credit scoring, as it is the score most commonly used by lenders. You can get your FICO score for free with these cards. Even though there are some new kids on the credit score block that have come along in fthe last few years, FICO remains the most popular.
When you check your score make sure it’s the real deal. As of Q4 2015, there are only three places you can buy real FICO scores and those are Experian (via its credit-monitoring service), Equifax and MyFICO. All the other websites sell Fake/Fako score because they don’t have a license for using the proprietary FICO scoring formula.
You have three FICO scores (one from each credit bureau), and each costs you $20 every time you check. However, rather than pay, you can actually get free access to your TransUnion FICO score if you have a card from Discover, American Express (which starting offering this service in August), Chase (on certain cards like Slate) or from Barclaycard:
Most websites also get the average seriously wrong, too. A FICO score can range from 300 to 850. There is a lot of misinformation on the internet as to what the average score is (many sources cite numbers in the 670’s). While that may be technically correct, those with ultra-low scores are dragging down the average (mean) big time. To get a better idea of what the average person has, you should be looking at the median instead – the number which is exactly in the middle (50 percent of individuals’ scores are lower and 50 percent are higher).
So what is the median credit score? For many years, FICO reported it as being 723. However, about 5 years ago they decided this statistic was “proprietary information” and ceased sharing it with the public. That said, it’s probably safe to assume the median still hovers around the 720 – 730 range. Regardless of whether you fall above or below this median score, you can find out what kinds of cards you might qualify for by using this handy tool from Capital One – it won’t affect your credit score to see what you might get:
Being that Fair Isaac was making money hand over fist with their FICO score model, it comes as no surprise that others wanted a piece of the action. The three credit bureaus – Experian, TransUnion, and Equifax – launched the VantageScore in 2006 to compete with FICO.
Comparing the VantageScore vs FICO score
So what is the highest credit score you can have on VantageScore? It used to be 990, and the lowest used to be 501. The range changed last year and is now 300 to 850, just like FICO.
Use this chart from the VantageScore website to compare the old and new scoring systems:
The exact formulas used for both FICO and VantageScore are kept very close to the vest by their corporate owners, so beyond an educated guess no one can say with 100 percent certainty how they are calculated. However some of the components that go into the scoring formula are made public and the table below allows you to compare them side-by-side:
As you see the VantageScore formula uses six components, compared to the FICO formula which consists of five. It is important to consider that each major component consists of several sub-components (of which the percentages for each aren’t publicly available). So actually the two formulas are more similar than they may appear at first glance. Let me give you an example:
According to FICO’s website, the “Amount Owed” category consists of:
- Number of accounts with balances
- Amount owed on accounts
- Amount owed on specific account types
- Proportion of credit lines used
- Proportion of installment debt which is owed
- Lack of a specific type of balance, in some cases
Those six sub-components, when combined, equal 30 percent of your credit score.
On the other hand, VantageScore doesn’t have an “Amounts Owed” category but judging from their category names, one can make an educated guess that they still look at those six sub-components. The difference is that it appears they aren’t all grouped under the same mother category.
Are they apples to apples?
Unfortunately there’s no simple algorithm available that enables you to convert your VantageScore into your FICO or vice versa.
Still, either one will allow you to monitor your credit health and track your credit-improvement process. Just check your FICO scores before applying for any major loan, because those are what lenders are most likely to be checking. For all its good intentions, the VantageScore hasn’t become widely used in the lending business. Whether it goes the way of the beta-max remains to be seen.
The Bottom Line?
Of course we all want the best, but the highest possible credit score — the 850 FICO — is almost unattainable. In fact, there are many loan officers that have been in the business for years who have said they’ve never seen a perfect 850 credit score before. Furthermore, a credit score in the high-700’s will usually get you the best rates anyway. Ultimately, instead of focusing on reaching the highest credit score possible, concentrate your efforts on having:
- A solid mix of different types of credit (revolving accounts like credit cards as well as installment accounts, like mortgages, student loans or car loans)
- Low utilization of credit lines (no more than 30 percent of your limit, but ideally, under 10%)
- The older the accounts, the better! If you have an old credit card you don’t use or abhor, resist the urge to cut it up and close the account. Keep it open and use it occasionally since the age of the credit will be augment your score. However, if the card has an annual fee and you truly won’t be using it, then usually it does make sense to cancel.
How I reached an 800 FICO early on
A number of our members have been able to achieve quite a lofty credit score quite early, often getting into the mid-700’s or higher in their early 20’s.
What’s the secret to their early success? Credit cards…and not just a few! In fact many rely solely on multiple credit card accounts to grow their scores rather than traditional loan products like student, auto or mortgage loans.
When managed responsibly, credit cards can be a powerful tool for increasing your score. It can be an effective strategy to have several different cards from different banks and card networks (Visa, MasterCard, Discover and American Express). Don’t worry, you don’t have to use all of them at once! Just use a couple at a time and rotate them every three to four months. Rinse and repeat. That’s what many credit-savvy people have been doing to build their scores and it has proven effective over time.
Specifically, it’s recommended to look for credit cards that have no annual fee unless there is some compelling annual bonus (like a free hotel night) to justify the fee. That way they can be used and kept for the long term (and doing that will increase the average age of your accounts, which is an important component of your credit score).
Last updated October 26, 2015