What is the highest credit score?

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In a Nutshell

The highest credit score you can get with the two main scoring models is 850. If you don’t have perfect scores today, don’t panic. Very few people do. As long as your scores are within what the three major consumer credit bureaus consider the highest range, you’ll be in a good position to qualify for the best interest rate offers on loans and mortgages.

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The highest credit score is 850.

VantageScore and FICO are the two main credit-scoring models. For both the VantageScore and base FICO® score models, the lowest score is 300 and the highest credit score is 850. But even if you have responsible credit habits, don’t be surprised if you check your scores and find that you are below 850.

Perfect credit scores can seem to be inexplicably out of reach. Out of 200 million consumers with credit scores, the average FICO score is 704. And as of April 2018, FICO says just 1% of Americans with credit scores had perfect FICO scores.


Why your credit score range matters

Thankfully, you don’t need a perfect score to qualify for some of the best rates on loans and mortgages. Scores in the 700s can qualify you for great interest rates. Get your scores anywhere above 760 and you’ll likely be offered the best rates on the market.

Why is this the case? Because banks and credit card companies care less about the specific numbers on your credit reports and more about the broad credit score range where your scores fall.

For example, FICO’s score bands look like this:

  • Poor: 300-579
  • Fair: 580-669
  • Good: 670-739
  • Very good: 740-799
  • Excellent: 800+

Improving your scores from 740 to 790 will likely have little effect on your interest rate offers since both scores fall in the “very good” range. But moving your scores from 650 to 700 could mean getting better interest rate offers.

If you want to improve your scores and get as close to 850 as you can, you’ll need to understand what causes your scores to go up or down.

All factors are not created equal

While VantageScore and FICO scoring models have differences, both make it clear that some factors are more influential than others.

For both models, payment history is the most important factor, followed by the total amount of credit you owe (also described as the percent of credit limit used and total balances/debt).

FICO uses percentages to indicate the importance of each factor to your credit scores.

FICO

Factor

Importance

Payment history 35%
Amounts owed 30%
Length of credit history 15%
New credit 10%
Credit mix 10%

 

VantageScore doesn’t assign specific percentages to factors, but it does state that some factors are more influential than others. Here’s how your VantageScore breaks down.

VantageScore

Factor

Importance

Payment history Extremely influential
Age and type of credit Highly influential
Percent of credit limit used Highly influential
Total balances/debt Moderately influential
Recent credit behavior and inquiries Less influential
Available credit Less influential

How to build higher credit scores

Based on the factors discussed above, here are a few strategies to help you build higher scores.

Pay your bills on time

This is the factor that influences your scores the most.

Setting up automatic payments on your credit card bills can be a helpful way to never forget a payment, but make sure you have enough money in your accounts to cover automatic payments. Otherwise, you may have to pay fees.

Make sure there are no negative marks on your credit report

Even if you’ve never missed a payment, there could be illegitimate negative marks on your credit reports. Be sure to check your Transunion and Equifax credit reports for free from Credit Karma and make sure there are no errors.

If you find incorrect marks on your reports, you can dispute them. Upon receiving a dispute, the credit-reporting companies are required to investigate and fix errors in a timely manner.

Even if you have legitimate negative marks on your credit reports, they will affect your scores less over time and should eventually fall off your reports completely.

Keep your credit-utilization rate low

Both scoring models weigh this factor heavily. To determine your current utilization rate, begin by adding up the credit limits of all your credit cards.

Let’s say you have two credit cards — one with a limit of $2,000 and another with a limit of $3,000. This gives you $5,000 of total available credit.

Next, divide your current total balances (what you owe) by your available credit and multiply it by 100 to get the percentage. Imagine you have $1,000 in outstanding balances. $1,000 divided by $5,000 is 0.20. So, in this example, your utilization rate would be 20%.

As you spend less of your available credit, your credit-utilization rate goes down. In the above example, if you reduced your credit card spending to $500, your utilization rate would drop to 10%.

What credit-utilization rate should you aim for? Using no more than 30% of your available credit is a great start.

Limit your hard credit inquiries

When you apply for credit of any kind, it generates a hard credit inquiry. Since applying for new credit can be an early sign that someone is dealing with financial troubles, hard inquires will have a slight negative effect on your scores temporarily.

If you want to get a really high score, you’ll want to limit your hard inquiries — meaning you should only apply for new credit when necessary.

Hard and soft credit inquiries: What they are and why they matter

Don’t cancel cards needlessly

As you can see, both models look favorably on consumers who have longer credit histories and lower credit-utilization ratios.

Unfortunately, you can’t magically create 10 years of credit history. What you can do is choose one or two credit cards to keep active and never cancel. Not only will this help you build a longer credit history, but it can also help you keep your credit-utilization rate low, since more active credit cards in your name means more available credit.


Bottom line

While having perfect credit scores may not be necessary to qualify for great rates on loans and mortgages, improving poor scores to good, or good scores to excellent, can make a big difference.

By following the right credit habits, you can make improvements to your scores.

And if you happen to reach 850 along the way, then consider it a cool bonus — and be sure to take a picture of it so you can brag about it to your friends and family.