How To Get A Perfect Credit Score


Here’s your no-nonsense guide to hitting that sweet 850 credit score.

Three credit cards sitting on top of a table creating an elegant view.

So you want a perfect credit score? It’s a lot of work, and few people have one. According to Experian, only 1.2% of Americans have an 850 credit score. Also, the number of Americans earning a perfect credit score has been increasing. Experian’s report also states that the number of Americans with an 850 credit score increased 63% over the past 10 years. This is excellent news! It means more consumers are being more responsible with credit.

Before we hop into all the good stuff. Let’s first lay some critical background information about credit scores and what they consist of. A credit score is generally considered a number between 300–850 (300 being the lowest and 850 being the highest) seeking to assess someone’s creditworthiness as a borrower of funds from creditors. Meaning it is a score that lets lenders and creditors know how responsible they are with the money that they receive. Generally, the higher your credit score, the less you pay on interest because creditors have more confidence that they will get paid back. It’s also important to mention that they are many credit scores out there, but the FICO and VantageScore are the two most-used scores.

Three consumer credit bureaus help keep track of your credit scores. They are ExperianTransUnion, and Equifax. In a nutshell, these credit bureaus collect data on your financial moves and organize that data into credit reports that they then sell to creditors and lenders. These credit reports help lenders make better lending decisions.

This article was put together to complement Todd Baldwin’s YouTube video, where he discusses how to get a perfect credit score. We’ll put the video below for your reference, and don’t forget to subscribe to his channel! 🙏😇

Always Pay on Time

Don't ever pay late or miss a payment. Doing so causes a significant adverse effect on your credit score. A good tip is to set up auto-pay or recurring payments, so you don't have to worry about missing a due date ever again. Paying on time is probably the most critical thing you can do to have excellent credit, and it's the easiest thing to do. Set auto pay and forget!

So, no matter what you do, don't miss a payment. Ever!

Use Credit Lightly / Have A Low Credit Usage Ratio

This seems counterintuitive, but typically people who have higher credit scores don't use credit often. It's important to remember that credit is a tool to help you achieve your financial goals, and leveraging one specific tool to the max won't do you any good. Aim to have a credit utilization ratio under 30% and shoot for less than 10% if you can. A credit usage ratio or utilization ratio is nothing more than a little metric that takes your total debt balances on all your credit cards divided by your total available credit limits.

Limit Your Hard Inquiries

Checking your score too often can lead to a lower score. A hard inquiry occurs when a creditor formally checks your credit and is different from a soft inquiry. A soft inquiry occurs when companies like CreditKarma show you your credit score, but not in a way that will adversely affect your score. We highly recommend using CreditKarma, and because it is free! Experian also has a great paid-service similar to CreditKarma but allows you to "boost" your score by linking accounts and self-reporting phone and/or utility bills.

Have a Long Credit History

Keeping accounts open is really important. If you close a single account, the average age of your credit history will decrease. Most people with high credit scores have had credit for 25 years or more. Even if you don't use the credit account, keeping it open and in good standing is essential for having a higher overall score. You'll have to make sure the lender doesn't accidentally close your account, though. If they see that you don't use a card or account, they might close it automatically. A best practice is to revisit the accounts you don't use every couple of months and use them if you can to ensure they'll stay open.

Rarely Open A New Account

Opening new accounts let lenders think you are desperate for new credit and may signal a higher default chance. Which kind of goes against conventional intuition. Typically people who open accounts have successfully navigated the lender's underwriting requirements. While not a huge thing to worry about, try to only open a new account unless you absolutely need it.

Don't Ever Carry A Balance

This may be tough for some, but try to pay off your credit cards every month. Take a look at the associated card or account's interest rate and work on paying them off, starting with the highest interest rate. This will help you minimize the amount of interest you'll have to pay. Another way to get some small wins is to pay off the account with the lowest balance first. Doing so will trick your brain into thinking you are doing more and will keep you motivated as you pay off more debt.

Ask for Line of Credit Increases

Probably one of the easiest ways to boost your credit score is simply by asking for a credit increase. You'll be able to do this by logging-on to your account and clicking the "Request Credit Increase" button somewhere on your account dashboard. You'll probably need to verify your income and some other account information. If you have a good relationship with exceptional payment history, the lender will most likely give you an increase. Having a higher credit limit will lower your credit usage ratio and is pretty easy to do.

Final Thoughts

Earning a perfect credit score is definitely hard work and requires years and years of consistent on-time payments and responsible financial habits. These seven tips will put you well on your way to the 850-club, though, and if we had to sum up what anyone's long-term credit strategy should be in a single sentence, it would be to consistently practice good credit habits over a long time. It's a marathon, not a sprint, even if you get some boosts along the way!

Thanks For Reading!

If you enjoyed reading this article and want to learn more about credit, consider checking out our post on the Top Credit Cards of 2021, where we discuss how to score sweet cashback and bonuses from new credit cards! Let us know in the comments your thoughts, and when you get a perfect score! If you’re interested in more of our work, head over to Millennial Investments to find content on markets, real estate, entrepreneurship, life hacks, and more! Happy reading, and thanks for supporting our work! 😇🙏


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