9 Signs You’re on Your Way to a Perfect Credit Score

Because we get it: Sometimes you just have to have that A-plus.

Hey, there, overachiever. Are you really trying to attain a perfect credit score? Here’s the thing: You don’t need to. Any score over 760 will pretty much net you a lender’s best rates and terms. Plus, even if you do score that elusive 850, you probably won’t keep it for long. Credit scores are mercurial: They change as new information hits your credit report or, most notably, as your loan balances go up and down. (Translation: Perfection is fleeting.)

But we get it. Sometimes you need that A-plus. So, in the interest of indulging your financial dreams, here are nine signs you could one day see a perfect credit score.

1. You’ve Never Missed a Loan or Credit Card Payment …

Payment history is the most important factor of credit scores, accounting for 35% of most popular scoring models. Plus, one little slip can do big damage once it hits your credit report — and it can stay on record for up to seven years. In other words: Don’t expect to see the highest score ever if you’ve missed a payment (or two) in that time frame.

2. … Or Any Other Bill’s Due Date for That Matter

Sure, utility companies, doctors, gyms and other service providers don’t routinely report missed payments to the credit bureaus, but collection agencies do. And, if you leave any old bill unattended long enough, that’s where the debt might end up, with a credit score fall to follow.

3. Your Debt Levels Are Virtually Non-Existent

The rule you commonly hear involves keeping the amount of debt you owe below at least 30% and ideally 10% of your total credit limit(s), particularly when we’re talking credit cards. If you’re trying to achieve credit perfection, you’ll want to focus on the ideal part.

Expert Intel: It’s a bit of a misnomer that you need to carry debt to build credit — you simply need to have credit accounts on the books that are being managed responsibly. So, for instance, someone could conceivably build a good credit score with a single credit card they pay off in full each month. People with 850s tend to have more than one loan on the books (more on this in a minute), but you’ll be best served in the long run by adding financing as you truly need (and can afford) it.

4. You’ve Had Good Credit for a While …

There’s a reason older demographics tend to have higher credit scores: Credit history, or the length of time you’ve been responsibly using credit, accounts for 15% of most scores. Technically, though, this category doesn’t have anything to do with your age. Instead, your credit history “starts” when you open your first credit account.

5. … But Haven’t Applied for Any New Loans Recently

That’ll boost your credit history, which also factors in the average age of your credit accounts. Plus, loan applications generate credit inquiries, which can ding your score for up to one year and hang out on your credit report for up to two. (More on how long stuff stays on your credit report here.)

6. You’ve Got a Mix of Credit Accounts on the Books

Credit scores give you maximum points for responsibly managing different types of credit. That’s why having, say, a mortgage, an auto loan and a credit card (or two) — all in good standing — tends to be a common characteristic of people in the 850 club. In technical terms, this means you have revolving lines of credit, like a credit card, and an installment loan, like that mortgage, on the books.

7. Your Public Record Is Clean

Judgments and liens can wind up on your credit file, though there are indications that will soon be changing. For now, though, a matter of public record could wind up hurting your credit score.

8. Your Credit Report Is Error-Free

Credit report errors can happen for a number of reasons and most misinformation will needlessly harm your credit. To achieve perfection, your file needs to be pristine — which you can help to ensure by diligently pulling your free annual credit reports from each major credit reporting agency and disputing any error you see.

9. You Keep a Compulsive Eye on Your Standing

You know the old adage “if a tree falls in a forest and no one’s around to hear it, does it make a sound?” Well, the same can be said about an 850 credit score. You’ve got to play all your credit cards right, and then you’ve got to be lucky enough to check your score at the precise moment perfection strikes. (Like we said earlier, that 850 probably isn’t going to stick around for long.) Fortunately, you can view two of your free credit scores, updated every 14 days, on Credit.com.

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Is a ‘Perfect’ Credit Score Even Possible?

perfect-credit-score

If you were someone who wasn’t satisfied in school unless you had a report card filled with As, then maybe a blemish-free 850 credit score is your adulthood equivalent. You’ve heard it exists, but you’ve yet to see the perfect credit score yourself.

But that may be OK, as “there is absolutely no advantage to having [an] 850 versus any other 800 number (or even high 700, in most cases),” Thomas Nitzsche, media relations manager for ClearPoint Credit Counseling Solutions, said in an email.

Is Perfection Possible? 

While it may not be essential, the fact of the matter is, getting a perfect credit score isn’t easy. Credit scoring algorithms are complicated, and even if you do take a look at your credit and see a gold-star 850, it’s unlikely you’ll keep it forever.

“A perfect score is possible but very rare,” Nitzsche said.

And, really, once you have what is deemed “excellent credit” — typically seen as about 750 on a 300 to 850 scale, which most major credit scoring models follow — you’ll likely qualify for the best interest rates and credit products anyway. Whether you have a score of 780 or a perfect 850 won’t make much of a difference to anyone (except you, if perfection is your thing).

Good Habits That Lead to Excellent Credit

What we’re saying is that, yes, you can get perfect credit, but you don’t have to. However, working toward having great or excellent credit is certainly something to strive for. So, how do you do it?

“If you pay your bills on time, keep your balances low and apply for credit only as needed, over time you can build the credit scores you need to get the credit you want without unnecessary stress or frustration,” Rod Griffin, director of public education at credit bureau Experian, said in an email.

In addition to having a strong payment history, good debt usage (which experts say is at least 30%, and ideally 10%, of your combined credit limit) and few hard inquiries, it’s important to note that your age of credit and diversity of credit accounts are other factors impacting major scores. (To see where your credit currently stands, you can review your free credit report summary, updated each month, on Credit.com.)

And organized perfectionists rejoice — getting a good credit score is your time to shine.

“Those who set reminders, obsess over due dates and outstanding debt, notice when bills are missing, etc. have an advantage over those who are more impulsive,” Nitzsche said.

What to Avoid

Nitzche said it’s important to stay current on payments, as missing one can harm your score and keep (or significantly delay) you from achieving credit perfection.

“Payment histories remain on your credit report for 7 years, so missing just one payment can haunt you for a long time,” Nitzsche said.

He added, “Beyond this, the most common problems we see are folks not using credit at all (thus having low scores) and consumers who overextend themselves, using too much of their available credit.”

Griffin pointed out that you should avoid comparing your scores to other people’s, as that’s not what lenders are doing.

“It is possible for two people to have the same credit scores but for very different reasons,” Griffin said. “The only way to know what you need to do to maximize your credit score is to identify the specific items from your personal credit history that are most affecting your personal credit score.”

Now’s the Time to Start Building Good Credit 

So, whether you’re after that perfect 850 or just want a score that will help you get better terms and conditions on your lines of credit, it’s never too late to start.

“Don’t wait until you need good credit to start working on a great credit score,” Nitzsche said. “It may not feel like it right now, but you will likely have financial goals in the future that require a good credit score — or that will be easier if you have a great credit score.”

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