When it comes to the world of credit scores, you know you’d rather have a prime number than a subprime score. Prime credit helps you qualify for loans at better rates and terms, and it can make getting an apartment, job, and even insurance easier.
But have you ever thought about shooting for the highest score possible? At 850, the highest credit score possible may seem like a pipe dream, but 1.2 percent of people with FICO scores prove that it’s possible.
Do You Need a Perfect Score to Borrow?
No, you don’t need a perfect score to borrow wisely. There is a variety of customer loans available to almost every credit score — you just have to know where to look. Here’s what you need to know about customer loans, including your options for direct payday loans and installment loans for bad credit.
These customer loans give you a chance to get the cash you need in an emergency, but you may have to pay higher rates to offset your bad credit. That’s why you should only borrow direct payday loans or installment loans for bad credit when you have no other options.
A Perfect Score Means a Flawless Record
The 850 score is synonymous with flawless credit. That means you can’t achieve it if you have negative entries in your report. Even a single late payment will throw you out of the running.
Improving Your Score Relies on Consistent Habits
Focus on what you can do in the meantime to add positive entries to your report. Every instance of good money management proves to lenders that you can handle a customer loan responsibly. Once your negative entries expire, your record will speak for itself.
But there’s a big difference between good credit and perfect credit. To get the latter, you have to commit to these positive money management habits every day.
1. Pay Bills on Time Your payment history (or how often you pay bills on time) makes up 35 percent of your score. If you’re shooting for an 850, you can never miss a bill. Focus on building your budget to ensure you always have the cash by the due date.
2. Ease off Revolving Products Your utilization ratio takes the next biggest piece of your credit score pie. It represents how much of your credit card and line of credit limits you use. While most people aim to keep their ratio below 30 percent, consumers with perfect scores need to keep theirs under 10 percent. In fact, the lower you go, the better.
3. Be Consistent
Your report doesn’t like change, so think twice before opening several new customer loans in a short period of time or closing old revolving accounts that are in good standing. These actions may not have as much sway over your score as payment history or utilization ratio, but they still have an effect. Remember, a flawless score leaves no room for mistakes, so you have to ace every factor.
The Takeaway
You can’t snap your fingers and get a perfect 850, but it is a possibility — even if you possess a subprime score at the moment. That’s because no score is permanent. It’s a constantly changing number that reflects your everyday money habits. Stick to the ones that build positive entries and keep negatives ones off your record — these habits may help you one day boast a perfect score.