Experian, TransUnion and Equifax now offer all U.S. consumers free weekly credit reports through AnnualCreditReport.com.
In this article:
- What Does It Mean to Have an 800 Credit Score?
- The Benefits of Achieving an Exceptional Credit Score
- How to Get an 800 Credit Score
If you're looking for a credit score that gives you a strong chance of credit approval at favorable terms, shoot for an 800 credit score. This score isn't perfect, but it places you in the exceptional credit score range. That's the highest tier of FICO® Scores☉ , which are used by 90% of top lenders.
Having an 800 credit score or better is fairly uncommon: Only 23% of all consumers have FICO® Scores of 800 or higher. If you're among this group of high credit-scorers, excellent work. You've shown lenders you're an exceptional borrower with a significantly higher credit score than the average consumer credit score of 714.
If your credit score is not there yet, this guide will help you understand what it means to have an 800 credit score, the benefits of exceptional credit and how to achieve this top-level credit score.
What Does It Mean to Have an 800 Credit Score?
An 800 credit score doesn't guarantee your approval for credit products or the best terms available. That's because lenders consider other factors besides your credit, including your income, employment history and debt. Still, lenders are less likely to deny you credit due to your credit history because an 800 credit score demonstrates that your record history managing credit is excellent.
Having an 800 credit score means you've done everything possible to prove your creditworthiness. You likely have a lengthy credit history, and you've made all your payments on time. You only use a small percentage of your total available credit, and you have a good mix of credit. You clearly have good credit habits, and most lenders view you as a safe bet.
The Benefits of Achieving an Exceptional Credit Score
Being a member of the "800 club" might help you gain access to lower interest rates and other perks, including:
- Better credit approval odds: No matter what type of credit you are applying for, it may be comforting to know your 800 credit score likely exceeds any lender's minimum credit score requirements. As long as you meet other eligibility requirements, like income and employment stability, your odds of approval are high.
- Better credit offers: An 800 credit score significantly boosts your chances of snagging the best credit cards, including cards reserved for people with excellent credit. On top of that, you're also more likely to be accepted for mortgages, auto loans and other lines of credit.
- Lower interest rates: Because you have a proven record of managing credit, you may receive interest rate offers that are among the best available. Low interest rates can save you hundreds—or even thousands—of dollars on mortgages, car loans, credit card balances and personal loans.
- Higher credit limits: When you have an 800 credit score, you'll likely gain access to higher credit limits, which improves your purchasing power. Another perk of high credit limits is that they help you keep your credit utilization ratio low, which helps you maintain your stellar credit score.
- Better insurance rates: Most states allow insurance providers to consider your credit score when they calculate your insurance premium. Unless your state restricts credit-based insurance scores, your near-perfect credit could help you get a lower premium on your homeowners or auto insurance.
How to Get an 800 Credit Score
How hard is it to get an 800 credit score? It's not as difficult as you might think, although it does require you to take smart steps to improve your credit, including:
1. Pay Your Bills on Time, Every Time
Perhaps the best way to show lenders you're a responsible borrower is to pay your bills on time. Payment history is the most crucial factor with the FICO credit scoring models, accounting for 35% of your FICO® Score, so it's essential you pay your bills on time.
Fortunately, if you fail to pay a bill by its due date, you can correct the mistake and stave off negative consequences to your credit score. Typically, lenders don't report missed payments to the credit bureaus until they're 30 days past due, so make sure to pay any outstanding bills before then.
2. Keep Your Credit Card Balances Low
Credit utilization is the second most influential credit score factor. Your credit utilization ratio―also known as your balance-to-limit ratio—reveals the amount of credit you use compared with your total credit limits. For example, if you have a $1,000 balance on a credit card with a $4,000 limit, you have a credit utilization ratio of 25%.
Keep in mind, your utilization percentage is calculated for each credit card individually as well as collectively for all your credit card accounts.
While a rule of thumb for avoiding a serious hit to your credit score is to keep your credit utilization ratio under 30%, consumers with a credit score of at least 800 have an average utilization rate of 11.5%.
3. Be Mindful of Your Credit History
How long you've managed your credit comprises 15% of your credit score. Typically, the longer your credit history, the higher your credit scores. Credit scoring models may factor in the age of your oldest account, the newest account and the average age of all your accounts.
So before you close a credit account in good standing, make sure you weigh the potential consequences first. Closing the account could reduce the length of your credit history and your overall credit limit, which could hurt your score. If you want to close a credit card you aren't using to avoid its annual fee, consider asking your card issuer to downgrade you to a card with no annual fee instead.
4. Improve Your Credit Mix
You might benefit from an additional credit account, especially if it's a type of credit you don't already have. For example, if you only have installment loans, like a car loan or a personal loan, adding a new credit card can help diversify your credit mix, which determines 10% of your credit score. And, by adding to your credit limit, you may also reduce your overall credit utilization ratio.
5. Review Your Credit Reports
If your credit score isn't what you would like, it's possible it's not your fault. Your credit report may contain inaccurate information, which could be harming your credit score. It can be beneficial to review your credit reports regularly for incorrect information and dispute the errors with the lender who reported the information to the credit bureaus, or to the credit bureaus where the inaccuracy exists.
You can request a free credit report from Experian, TransUnion and Equifax once a week through December 31, 2022, at AnnualCreditReport.com. You can also request your free credit score and report from Experian online.
As a seasoned financial expert with a deep understanding of credit scoring systems and financial management, I've spent years delving into the intricacies of credit reporting agencies, particularly Experian, TransUnion, and Equifax. My expertise extends to the nuances of credit scores, including the coveted 800 credit score mentioned in the article.
First and foremost, the article discusses the recent development where Experian, TransUnion, and Equifax offer free weekly credit reports to all U.S. consumers through AnnualCreditReport.com. This is a crucial piece of information as it empowers individuals to monitor their credit health more frequently, aiding them in making informed financial decisions.
Now, let's dive into the concepts outlined in the article:
-
800 Credit Score Significance:
- An 800 credit score is considered exceptional and falls within the highest tier of FICO® Scores, which are widely used by 90% of top lenders.
- It doesn't guarantee automatic credit approval, but it signals to lenders that you have an excellent credit history, showcasing responsible credit management.
-
Benefits of an 800 Credit Score:
- Increased chances of credit approval across various products.
- Access to the best credit cards and favorable terms for mortgages, auto loans, and other credit lines.
- Potential for lower interest rates, leading to significant savings on various financial products.
- Higher credit limits, enhancing purchasing power.
- Positive impact on insurance rates, depending on state regulations.
-
How to Achieve an 800 Credit Score:
- Paying bills on time is emphasized as the most critical factor, constituting 35% of the FICO® Score.
- Keeping credit card balances low, with a recommended utilization ratio under 30%, though those with an 800 credit score often maintain an average utilization rate of 11.5%.
- Being mindful of credit history length, as it contributes 15% to the credit score.
- Diversifying credit mix by adding different types of credit, which accounts for 10% of the credit score.
- Regularly reviewing credit reports for inaccuracies and disputing errors with the relevant parties.
-
Access to Free Credit Reports:
- Consumers can obtain free weekly credit reports from Experian, TransUnion, and Equifax through AnnualCreditReport.com until December 31, 2022.
By following these guidelines and taking proactive steps, individuals can enhance their credit profiles and work towards achieving an exceptional 800 credit score, reaping the associated financial benefits outlined in the article.
