It’s the holy grail of credit scores: the seemingly bullet-proof credit score of 800 and above. For an over-achiever it’s a badge. For the credit-proud, a testament of hard work. But…is it worth pursuing?
To see what goes into an 800+ score, we combed through sources like the blog of the Fair Isaac Corporation, the company behind the FICO score.
Here’s some of the information we found:
23% of the U.S. credit population has a credit score of 800 to 850
85% of people scoring 800+ are over the age of 43
Paying on time matters: FICO says people with high scores have a history of paying on time. Plus, payment history accounts for 35% of your FICO score. It’s kind of a big deal.
Debt vs credit matters: The ratio of your debt compared to the amount of credit that’s available accounts for up 30% of your FICO score. When utilization becomes lopsided (as in using up a lot of your available credit), you can weaken your score. FICO’s finding: people with “exceptional” credit (i.e. 800-plus) use on average around 7% of their available credit.
How long you’ve had credit matters: Your credit history is a track record, and FICO says higher credit scores tend to be linked to longer histories. It’s why closing an older credit card could have negative consequences; it essentially shortens your credit history.
On this last point, the credit bureau TransUnion has mentioned that in order to begin building credit earlier you can be added as an authorized user on a parent’s credit card, for example, could help you build your credit earlier.
Credit scores change because of things you can control, like applying for a new credit card, which could impact on your credit portfolio, just as closing credit cards does, too.
But credit scores can also be affected by things you don’t have control over, like fraud. A good way to watch out for fraud or keep errors off of your credit reports is to monitor them:
You’re entitled to receive a free credit report from each of the credit bureaus —Equifax, TransUnion, and Experian — once every 12 months.
In addition to bragging rights, having and maintaining an 800+ credit score could come with some additional benefits: you’re considered to have excellent credit. As such, lenders are more likely to approve a loan or credit account as well as offer you a low interest rate.