A credit score above 800 can gain elite status. Experian data shows that only 21% of consumers have a credit score of 800 or higher. A credit score of 800 means you qualify for the best loan terms. This can lead to significant savings in the long run.
But how hard is it to achieve a credit score of 800 points? Penny Hoarder interviewed several people with a credit score over 800 to understand what they did to get a high credit score.
9 Habits of People with 800 Credit Scores
While many people with a credit score of 800 have struggled to manage their money for years, many admit to making credit mistakes in the past, so even if you’re not perfect, you can recover. If you want to know how to get 800 points credit, copy the usual habits of these nine people with near-perfect credit scores.
Habit 1: They never miss a payment
This is not quite a secret. But the first thing people who reach 800 have in common is that they will never miss a payment or delay paying a bill. According to data from Experian, only 6% of people with a credit score above 800 have no or delayed payments on their credit reports.
your Payment history 35% of your FICO score, more than anyone else credit factor. Missed or delayed payments are kept in your credit report for seven years, but the damage to your credit score was the most severe in the first two years.
Habit 2: They Set Up Their Own Payment Schedule
Many people with credit scores in the 800s only need to use automatic pay once a month to pay their bills. But many of them find that more frequent manual payments are the key to their success. Many people pay weekly or biweekly, and if they make a large purchase, they pay as soon as the balance is posted.
Phillip Godinez, financial coach Personal financial guidance to achieve your goals Payment will be made on the 15th and 30th of the month after it is paid. This gave him a near-perfect credit score of 840.
“On the 15th, I logged in and paid all the bills due between the 15th and the 30th,” Godines said. “On the 30th, I paid all the bills due between the 1st and the 15th. Keeping a regular schedule helps me remember. Since I’m unlikely to make more money between paychecks, I prefer this method to handle everything without worrying about a few more weeks.”
Habit 3: They have no balance
One of the best things you can do for your credit score is keep your credit score credit usage low. Your usage is the percentage of the outstanding credit you are currently using.
The standard recommendation is to keep it below 30%, but most 800 club members said they keep it below 10%. Most people report paying off their entire credit card balance every month, but a few people make the occasional exception for large purchases, especially if they have a temporary 0% interest period.
Antonio Talledo, the founder of Limon Financial, has earned a credit score of 807 since getting his first credit card about 12 years ago. Although he used to have a balance, he now pays his bills in full on the first day of every month.
He said, “I think the biggest impact on my credit score initially was my balance going below 10%, and now it’s down to 0%.” “A few years ago I had about 30% of my balance and my score is less than 700.”
Habit 4: They Don’t Cancel Old Credit Cards
People with top-notch credit rarely cancel old credit card bills, even if they’ve already paid off their balance. There are two reasons: when you close the card, you reduce the available credit, which increases your usage. Unless it’s one of your newer cards, you can also Average credit age, which determines 15% of your score.
Andrew Chen, founder of the website Crack your wealth If the credit score is above 800, it is recommended that you do not cancel the old account until it is determined that the card is no longer in use. The annual fee is expensive and the card is relatively new, preferably less than two years.
“I particularly urge [against] Closing a card account that has no annual fee,” Chen said. “Keeping the card costs nothing, and having an experienced credit account in your credit file will help your credit score. “
Habit 5: They often use their cards
Once you have an excellent credit score, you qualify for some really sweet cards Credit Card RewardsBut people with high credit scores usually use all their cards from time to time, even those old cards that don’t offer wonderful privileges. If you don’t use a credit card often, the credit card company may cancel your inactivity. This lowers your credit limit and credit age, both of which are detrimental to your score.
Alli Williams, Founder and CEO Focus on financeSo keep her oldest card open and use it for subscriptions only. “This card isn’t the best choice for bonus points, so I won’t miss out on a few small subscriptions with it,” she said.
Habit 6: They selectively apply for new credit
People with excellent credit scores have a choice when applying for new credit. A new account may lower your credit age. In addition, when you apply for credit, it will lead to: Hard research To your credit report. Too many credit applications or multiple credit applications in a short period of time can hurt your credit score.
Most people with a credit score of 800 said they apply for a new credit account no more than twice a year — and many people apply much less often.
Annette Harris, Owner Harris Financial Coach, said she and her husband have maintained a credit score of over 800 for the past five years. They apply for new credits about every three years, usually only for credit cards that offer bonus points.
Harris said: “When we apply for a credit card, we are very selective and make sure that the card has no associated annual fees and that the interest is less than 13%.”
Habit 7: They ask for frequent credit line increases
People with a credit score of 800 usually don’t open new accounts very often, but often try to increase the credit limit of their existing account – and when their credit card issuer provides a credit limit, they never refuse to increase it. Increasing the limit decreases your credit utilization rate, but not your credit age. In general, you can also avoid difficult questions.
Habit 8: They’re Using a Credit Freeze
The credit freeze is a popular tool for people with near-perfect credit scores Credit freeze Block access to your credit report, making it harder for scammers to apply for credit on your behalf. You can contact any of the three credit bureaus to set it up. From September 2019 you can freeze and thaw your credit for free.
Chen said, “It used to cost $10 per surgery.” “Since it’s free now, there’s no reason not to freeze your credit. It protects you by prohibiting unauthorized access to your credit file, and it protects you effectively with credit.”
Habit 9: They don’t pay too much attention to their credit score
People with good credit tend to be vigilant about monitoring their creditworthiness. Many people use the free credit report service and use it every year Annual credit report.comBut other than that, they didn’t care much about their scores. Their scores are high because they develop good financial management habits over time.
Tyler Ellis, Founder Don’t panic, do it!, is 28 years old and has a credit score of over 800 years. He only uses a credit card to earn points and then pays out immediately, but he will keep it for one second in case his main card is lost or stolen.
“I bought the car with cash and quickly paid off the student loan, so my only debt was a mortgage,” Ellis said. “Other than that, I’ve never done anything special to try to artificially improve my credit score. I just don’t spend money that I don’t have.”
Do you really need a credit score of 800?
A credit score of 800 will definitely brag you, but if you haven’t reached it yet, don’t panic. The good news is that if you have a good credit score, you’ll qualify for the best loan terms and the lowest interest rates in the mid-700s. Regardless of your credit status, you need to do the following to improve your credit score:
- Pay in time. By paying on time for six months to a year, you will see an increase in FICO scores. Within two years, losses due to arrears will also decrease.
- Reduce your credit usage. Paying off your credit card balance and requesting a higher limit will increase your credit score. Reducing credit card debt has a greater impact than paying back a car loan or student loan because it reduces your credit usage.
- be patient. Credit history takes time to establish. No one gets a credit score over 800 overnight. Stick with your oldest account to maintain the highest credit age possible.
- Stay vigilant. Use the free credit monitoring service to receive notifications about any changes to your credit report. Also, be sure to use the three major credit bureaus (Equifax, Experian, and Transunion) to check your credit report every year. Annual credit report.com. Arguing directly with credit bureaus for incorrect information.
Finding a payment system that works for you and lives within your means can also help you achieve a credit score of 800 or higher. But treat it as a long-term goal. When you’re looking for financing and lower interest rates, raising your credit score increases your chances of getting approved. This is worth celebrating even if you don’t make the 800.
Robin Hartill is Penny Hoarder’s Certified Financial Planner and Senior Writer. She wrote a column of personal financial advice for Dear Penny.Send your tough money questions to [email protected]