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Achieving a perfect credit score of 850 may seem out of reach, but many Americans have successfully reached this pinnacle. While having a perfect credit score is not necessary to secure the best credit card offers and mortgage terms, individuals who achieve an 850 score often exhibit certain key habits that distinguish them from others.
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Whether you are looking to enhance your credit score or simply interested in what it takes, here are four common characteristics of individuals with a perfect credit score:
1. Consistent On-Time Payments
Payment history is the most significant factor in determining your credit score, accounting for 35% of your FICO® Score. Those with a perfect 850 credit score consistently make on-time payments for credit cards, mortgages, and utility bills. Missing even one payment can negatively impact your score, although most creditors only report late payments that are 30 days or more past due. Therefore, setting up autopay, using payment reminders, paying early, and staying diligent about due dates can help avoid late payments.
2. Low Credit Card Balances
Credit utilization is another important credit score factor, measuring the percentage of available credit used compared to outstanding debts. Individuals with an 850 credit score keep their credit utilization below 10%, well under the general recommendation of staying below 30%. They typically pay off their credit card balances in full each month to maintain low utilization. To improve your credit score, consider opening a high-limit credit card or requesting credit limit extensions from existing card issuers to increase available credit and lower your utilization ratio.
3. Lengthy Credit History
Credit age contributes 15% to your FICO® Score, and individuals with a perfect credit score usually have a long history of responsible credit use spanning several decades. While you cannot accelerate time, you can make wise decisions to enhance this factor by keeping old accounts open, avoiding opening numerous new accounts, and starting to build credit early in life. It is advisable to keep old credit card accounts active with occasional small purchases, especially if there are no annual fees attached.
4. Regular Credit Report Monitoring
Even the most responsible credit users are susceptible to fraudulent activities, errors, or identity theft. Therefore, individuals with perfect credit scores monitor their credit reports vigilantly. It is recommended to check your credit report at least annually, obtain a free report from AnnualCreditReport.com, scrutinize for inaccuracies, and promptly dispute any errors. In case of suspected fraud, consider freezing your accounts to prevent unauthorized activities.
A flawless credit score is impressive, but not essential. While achieving a perfect 850 FICO® Score may not be mandatory, adopting certain habits can assist you in establishing and preserving an outstanding score to become eligible for top-tier credit cards and mortgage rates. By consistently making timely payments, maintaining low balances, retaining older accounts, and monitoring your credit report, you are well on your way to attaining a prestigious credit standing.
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