4 Simple Steps to get an 800+ Credit Score
Nov 23, 2022
As you know in the United States, we operate on a credit system. This makes understanding the fundamentals of how to effectively build credit extremely important.
If you want an above average credit score, aim for a score of 800 or above. When you obtain an 800+ credit score it puts you in the highest credit score range available.
With this credit score you will pose the lowest risk to lenders and will get the best APR rate available.
What does it take to get an 800+ credit score, how do you get it? What are the benefits of an 800+ credit score?
Did you know in America, only 21.8% of Americans have a score that is at least 800, according to a FICO report?
To achieve a credit score of 800+ you must have done an exceptional job of managing your credit.
Some of the traits of obtaining this score is having the following:
● long credit history
● perfect payment history
● good credit mix
And a point most of us miss…. Use only a small percentage of your total credit limit. In finance, lenders view a person with an 800+ credit score as someone who is less likely to default on a loan versus individuals with a lower score.
How to get an 800 Credit Score
Applying these tips could help you see improvement in your credit score:
1. Build and Improve Your Credit History
The length of your credit history accounts for 15% of your credit score, therefore negative, minimal, or no credit history can hinder you from getting an 800+ credit score.
To fix this problem, you need to focus on building credit. One way to build up credit history is to apply for your first credit card or take out a credit builder loan.
A credit building loan is a personal loan that is created to help you add positive payment history to your credit report.
The catch here is that it doesn’t operate as a traditional personal loan where you receive a lump sum of money and back principal and interest.
With a credit building loan, the lender puts the funds in a savings account or certificate of deposit (CD), and you get access to the money after repaying the loan.
If you can’t get approved for a credit building loan, apply for a credit card to build your credit history. If you can’t get approved for a traditional credit card, look at a secured credit loan.
A secured credit loan will require you to make a cash deposit that’s held in a collateral account. One great book that I read on building and improving credit is How to Build Credit.
2. Payment History is Essential
Paying your bills on time all the time is critical. The most important credit score factor is payment history which accounts for 35% of your FICO score.
Your goal is to never miss a payment. After 30 days past due on bills, your creditor can report this to the credit bureaus.
Once the creditor reports it to the bureaus and you have a missed payment on your credit, it does serious damage to your credit score. Therefore a budget and tracking tool is important so you can stay on top of your bills each month.
You know where your money is going, and in The Career Mompreneur MoneyPro Financial Plan in the Gold Membership, it provides a detailed budget analysis for you.
Tip: Enrolling in autopay is a lifesaver for your fixed bills and expenses so you are never late.
3. Keep your credit utilization rate low
The second most important credit factor is your credit utilization rate compared to your total credit limit.
Your credit utilization ratio accounts for 30% of your credit score. As you can see, payment history is 35% and credit utilization ratio is 30%, that is already a total of 65% of what makes up your credit score.
The utilization ratio looks at how much credit you are using compared to your total credit limit. For example, if your total credit limit is $15,000 aim to not use more than 30% of it-$4,500.
4. Review your credit reports every six months.
It’s important to keep track of your credit and monitor your score. Go through each item on your credit report and make sure it is accurate.
If you find any errors on your credit report, dispute it right away with each credit bureau for it to be removed.
Some benefits of 800+ credit score is the following:
When you have an excellent credit score it becomes easier to get qualified for loans, lower rates, and credit card offers.
For example, when you have an 800+ credit score you can get approved for 0% APR on certain credit cards and loans.
Did you know that states that offer credit-based insurance premiums allow you to get discounts on homeowners or auto insurance if you have an 800+ credit score?
Make sure you check with the state you live in to see if you can receive a discount on homeowners and auto insurance.
To get personalized help about your Credit score building and to receive The Career Mompreneur MoneyPro Financial Plan make sure you SUBSCRIBE today for the Gold Membership.
The Gold Membership offers exclusive access to financial tips, blogs, videos, The MoneyPro (budget analysis, goal analysis, net worth, and recommendations to achieve all your financial goals.) Good to get you started.
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