Why should you learn how to get an 800 credit score or higher? Having good credit is an essential part of financial success. You need credit to become a homeowner, purchase a car, get a credit card, and sometimes you even need good credit to rent an apartment. But what is better than having “good credit?”
The answer is excellent credit! Achieving a high credit score of 800 can really help you go far when it comes to your finances. If you’re searching for ways to accomplish a credit score of 800 and above, you’re in the right place.
This article will discuss why having a high credit score is important, the perks of having an 800 credit score, and six essential ways how to get 800 credit score.
Is 800 a good credit score?
You may wonder, “What is the best credit score?” and “Is 800 a good credit score to have?” Well, since the credit score table range is 300-850—yes, 800 is an excellent credit score to have.
Lenders commonly use what is known as a FICO credit score to determine whether you qualify for loans. This score comprises three digits and ranges from 300-850. The lower the score, the worse your credit is. The higher your score, the better your credit is.
Depending on where you land on the credit score range determines your eligibility to attain credit. Here is a breakdown of the FICO credit score ranges:
- Excellent: 800-850
- Very Good: 740-799
- Good: 670-739
- Fair: 580-669
- Poor: 300-579
This score helps lenders determine what type of borrower you are. According to the score range, you are considered a “high-risk” borrower if you have a low credit score. This means there is a high possibility that you may be unable to pay off the loan amount you are trying to borrow.
Those with a credit score of 800 are considered “low-risk” borrowers and have a good credit history of paying their debts off and bills on time. So, you can see why you should learn how to get an 800 credit score!
Perks of having an 800 credit score
Having a credit score of 800 comes with quite a few benefits. One of the main perks is saving money by getting better interest rates on loans. Interest is what you pay the lender in addition to the amount you borrow.
So, let’s say you are trying to get a 5-year loan of $20,000 to buy a car and have a fair credit score of 625. Since 625 is a fair credit score, you will be considered a moderately risky borrower.
This means your interest rate will be higher than if you had a credit score of 800. If you were given an 8% rate, your interest on this loan would cost about $3,294.
But, if you had a higher credit score, you would be given a better rate and could save money. For example, if you had a 5% rate instead of the 8%, the amount of interest on this loan would only cost $1,984. You would save $1,310 just because you have a better credit score!
Another benefit is the ability to get approved for loans when you need them because you are considered a low-risk borrower. So, when you decide to purchase a home or open a new credit card, you are more likely to get approved with a credit score of 800.
Your utilities and cell phone are other things your credit score can affect. If you have poor credit, you may have to pay a deposit to get a cell phone plan. Poor credit can also make getting utility services such as electricity or cable more challenging.
As you can see, credit really has an impact on your everyday life and finances! So, let’s jump into our helpful guide on how to get an 800 credit score.
How to get 800 credit score: 6 Essential steps
Are you ready to boost your credit score so you can take control of your finances? Improving your credit is not as difficult as you may think. Here are six essential steps to achieve a credit score of 800 and above!
1. Keep credit card balances low
Credit card balances can have a massive impact on your credit score. If you carry high balances on your cards, then it’s time to work towards paying them down.
A good rule of thumb is to keep your credit utilization rate around 30% or lower. For instance, if you have a credit card with a $5,000 limit, you would want to keep your balance below $1,500 to achieve a 30% utilization rate.
30% is a good goal if you are in heavy credit card debt, but according to financial experts, you should not exceed a 10% utilization rate to achieve an excellent credit score.
Try using a debt payoff strategy such as the “Avalanche Method” or “Debt Snowball Method” to help you pay off those high-interest credit cards faster. Keeping your credit card balances low is how to get an 800 credit score and stay out of expensive debt too!
2. Limit the number of credit cards you have
It’s easy to acquire too many credit cards these days. There are so many different credit cards available, and special promo offers can quickly suck you into opening cards you may not even need.
However, having more than one credit card can help you build your score, but having too many can tempt impulse spending and lead to higher balances and a lower credit score. Lenders also look at the potential risk of you “maxing out” these outstanding credit lines.
There’s no magic number, but usually, 2-3 credit cards are a good amount to have. This makes them easy to manage and helps you build credit by making timely payments.
Try to have cards with low or fixed interest rates if possible. Just in case you do carry a balance from time to time, it can help save you money in interest if you don’t pay them off every month.
3. Downsize the amount of debt you have
Too much debt can hurt your credit score; this is especially true for credit card debt. That’s why paying those cards down can drastically improve your credit score. If you do pay off a credit card, keep the credit line open because closing it can hurt your score.
Credit is made up of many factors, such as credit history, the mix of credit you have, such as installment loans and credit cards, and your payment history. So, closing a credit card that has been open for many years can do more damage than good.
Although paying off installment loans doesn’t affect your score as much as lowering the amount of credit card debt, it’s still an important piece of the credit score puzzle. It shows lenders that you follow through and pay as promised on your loans.
Downsizing your debt can help you attain a credit score of 800 and become financially successful too!
4. Pay off accounts in collections
Depending on the type of scoring system used, paying off a debt that has gone to collections may or may not help raise your score. It varies because lenders using newer scoring models such as FICO 9 ignore collection accounts with a zero balance. So, if they use these updated versions, it could help raise your score a bit.
However, it looks better to potential lenders if you do pay these debts off rather than having them sit in collections.
If you have a financial hardship, don’t let your outstanding debts go into collections. Call your creditors and explain your situation; they may offer you a repayment plan to help you avoid a collections account.
Contacting your creditors and working out a plan can prevent your accounts from going into collections and help you avoid a hit to your credit score too.
5. Pay your bills on time every month
Are you wondering how to get an 800 credit score with ease? Pay your bills on time every single month. Payment history makes up about 35% of your credit score, so making your payments on time significantly impacts your score.
Make your life easier by setting up automatic payments, so you are never late with your bills. You basically put your bills on auto-pilot, so you don’t have to pay hefty late fees or lower your credit score because you slipped up that month.
You can also set up additional amounts to be paid on your credit cards so you can make getting out of debt easier too!
6. Review your credit regularly
It’s essential that you keep a close eye on your credit regularly, especially with identity theft on the rise. Checking your credit report can help you prevent credit fraud and notify you of any mistakes that may be on your report as well.
You can get a free copy to all three major credit bureaus at annualcreditreport.com. There are also paid subscription services, such as MyFico, where you can access your credit report and scores every month.
Regularly reviewing credit can help you work towards improving your score quickly.
You can achieve an 800 credit score!
Whether you are starting to build your credit or just trying to improve it, you can achieve a credit score of 800 or higher! Remember to pay your bills on time, reduce your credit card debt, and keep an eye on your credit report regularly.
These simple steps will help you attain an excellent credit score and work towards financial success.
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