As part of an article published by WalletHub, professor of marketing Dan Horne offered advice on how to build the best credit score you can, and what high credit scores are worth. Credit scores are undoubtedly very important to keep on top of, and it’s important that people know what their credit scores are and how to keep them high.
According to the article, less than 1% of people have the perfect credit score of 850. So, it can be argued that anyone with a credit score over 800 has “perfect credit.” This is because many times, any credit score over 800 can be the highest score possible for minimizing the cost of borrowing. Therefore, attaining a credit score of 850 isn’t as crucial as some may think.
The article also covers what is needed in order to achieve the perfect 850. Though there are many methods to attain perfect credit, some aspects of a perfect score might include 100% on-time payments, 1% to 10% credit utilization, and an average trade line of 9 years or more. It can be very difficult (and unnecessary) to achieve an 850 credit score. It is more important for the person to maximize it where possible and work toward achieving the highest possible score given his or her circumstances.
According to WalletHub’s article, some ways to maximize credit score include maximizing available credit, never missing a payment, not rushing to obtain credit too soon, and not getting discouraged if the 850 is never reached. The article then interviews Dr. Horne for an outsider’s perspective on how realistic an 850 credit score is. According to Dr. Horne, there is no real point in trying to reach an 850 credit score, since a score above 800 is considered excellent. Lenders will always be comfortable extending credit to these people, as the money will always be paid back. Dr. Horne says that approximately 1% of people have a perfect 850 credit score, but it’s just as impressive to have an 800 or above.
When asked for advice for anyone seeking an 850 credit score, Dr. Horne says to “be patient and don’t make a lot of changes.” He explains that a large part of credit score is history. As time goes on, and the longer a person has been meeting their obligations, the higher their credit score will be.
To read the full article from WalletHub along with Dr. Horne’s interview, click here!