Is it possible to have a perfect credit score? What is the highest possible?
Achieving a high credit score to get the best rates on credit cards and loans requires time and discipline. But is there a perfect score? Can it be reached?
Around 90 percent of financial institutions look at your credit score to determine whether they will give you a loan or a line of credit as well as the terms. Attaining a high credit score can be beneficial for your finances, not just through what needs to be done to get there but also receiving more favorable interest rates.
There are five categories of credit scores with those in the range of 670-739 considered ‘good’ as they are close to average or slightly above average. But how high can your score go if you work at it and is it possible to have a perfect credit score?
What is the highest possible credit score?
Credit scores are determined from data reported by lenders related to a number of factors from your credit history. Those that can get a score of 800 or more will be in the elite category of people considered ‘exceptional’ borrowers. However, technically, there is an upper limit to the highest credit score you can attain, which is 850 according to the most common credit models.
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Is it possible to have a perfect credit score?
While it might seem impossible to reach an 850 credit score, there are more people who have attained the highest possible score than one would imagine. According to Experian, slightly over 1.3 percent of all FICO scores in the US were 850 based on data analyzed from the third quarter of 2021.
How to get a perfect credit score?
Achieving a high credit score to get the best rates on credit cards and loans requires time and discipline. And those who have a perfect score have some characteristics that differentiate them from average consumers. The majority are from older generations, baby boomers and the silent generation in particular. According to the data analyzed in 2021 by Experian, only 27 percent of those under age 57 had a perfect 850 score.
This makes sense as they have been able to develop the length of their credit history. While not the largest share of a credit score, this accounts for 15 percent of your credit score. Also, they have kept their tradelines free of delinquencies, payment history makes up 35 percent of a credit score.
Additional characteristics of those with perfect scores compared to the average US consumer is that they have more credit products on their credit reports boosting the credit mix portion, which represents 10 percent of a FICO score. Likewise, they carry more credit cards while owing less than half of the national average.
However, don’t fret if you think you’ll never be able to reach a perfect score or even an ‘exceptional’ score. “Those with ‘very good’ scores (FICO® Scores from 740 to 799) may receive offers similar or identical to those with an exceptional or perfect score,” Experian says.