What is the highest credit score possible?
Having perfect credit is an admirable goal, but it can be a confusing one. After all, what is the highest credit score and is it even possible to achieve it?
If these are the questions on your mind, keep reading for everything you need to know about credit scores—including how to get yours higher than it has ever been.
What's the point of a credit score?
Credit scores greatly influence what you can do with your finances—from buying a car to renting an apartment. But what, actually, is the point of a credit score?
Basically, a credit score measures your "creditworthiness" as a consumer. Your creditworthiness determines your likelihood of defaulting on debt and indicates whether you're qualified to receive new lines of credit. Lenders will look at your score to evaluate the risk you present as a borrower—higher score, lower risk.
But why does any of this matter? Well, if you ever plan on buying a car, renting a home, or taking out a loan, good credit can help you get approved. Plus, a high score can earn a better interest rate, saving you money in the long run.
Having the highest possible credit score is obviously the goal. To get there, it's important to know a little bit about how your score is calculated.
How credit scores work
So, where does your credit score come from? This number is calculated by credit bureaus and determined by several factors (more on these later). There are a handful of credit bureaus, but the top 3 are TransUnion, Equifax, and Experian.
Credit bureaus have different ways of calculating credit scores. Because of this, it's pretty common to see your score vary slightly, depending on where you're checking it. This doesn't mean your scores are wrong, just that you rank differently on each scoring method.
The FICO score
The Fair Isaac Corporation, or FICO, created the credit scoring model that most bureaus use today. This system uses a set of ranges that sorts borrowers into groups of varying creditworthiness.
All about ranges: what is the highest credit score?
Your credit score can be any number between 300 and 850. This number determines how your credit is judged on a scale from "poor" to "excellent."
If your credit score is 579 or less, most creditors will place your credit in the "poor" category. To lenders, this signals that you might be a risky person to lend money to. Scores between 580 and 669 are considered fair, and may lead to loan approvals despite being below average.
Most lenders consider any score between 670 and 739 a good score. The average borrower tends to fall within this range.
According to the FICO model, a credit score between 740 and 799 is considered very good, while 800 and beyond is an excellent score.
So, what's the highest credit score? The magic number is 850, which is the maximum FICO score you can be assigned. Get your score this high and you'll earn bragging rights along with ultra-low interest rates.
Factors that affect your credit score
You now know that 850 is the ultimate credit goal. But if you're like most people, your score isn't quite there yet.
The truth is, there's a lot that goes into calculating a credit score. Everything from the amount of debt owed to the type of credit used can impact the final number. Plus, credit bureaus place more emphasis on different factors, resulting in scores that vary. If you're trying to boost your credit score, here are some key factors to monitor.
Your payment history makes up 35% of your FICO score. Basically, creditors will look at a record of your past payments to make sure they've been paid on time and in full.
Credit card history isn't the only thing a creditor will see when they check your record. Everything from student loans to department store financing accounts is included, so keeping track of your payments is a must.
If you're a pro when it comes to on-time payments, keep living your best financial life. If you've missed a handful of payments in the past, now's the time to make a habit of paying on time.
Amount of debt owed
The total amount of debt you owe makes up another 30% of your FICO score. This covers the amount of credit you have available, as well as your credit utilization rate.
Creditors like to see that you aren't maxing out every line of credit—to them, it's a sign that you'll be able to make your payments on time. This is where the utilization rate comes in. Essentially, it's the percentage of your available credit that's currently in use.
A low utilization rate suggests you carry less risk as a borrower. On the other hand, a high utilization rate carries more—after all, the more credit used, the greater chance there is for a missed payment.
Credit history length
Credit history length accounts for another 15% of your FICO score and refers to the amount of time your credit accounts have been active.
The longer your credit history, the less risky you appear as a borrower. This is mainly because a long credit history has more data to pull from when calculating a score. The good news is, all you need to do to improve this scoring factor is sit back and let time do the work.
Hard inquiries and new credit
Hard inquiries occur when you apply for a new line of credit, like a loan or a credit card. Too many of these in a short period of time can lower your score, so it's best to limit them when you can. Additionally, 10% of your FICO score is made up of new credit. This can affect the strength of your credit history, so it's a good idea to open new credit lines sparingly.
The final 10% of your FICO score is determined by the type of credit listed in your history. Generally, it's a good idea to have a mix of credit types to show creditors that you can effectively manage different accounts.
Ideally, you'll have a blend of revolving credit (like credit cards) and installment credit (like student loans and mortgages). Multiple account types are key to diversifying your credit history and showing off your financial skills to creditors.
The perks of having a high score
A good credit score requires you to spend some time building a strategy and monitoring your credit use. But is it really worth the effort? If your score falls into FICO's "good" category, why bother trying to raise it?
The truth is, a high credit score is a gateway to greater financial freedom. People with high scores typically have lower insurance premiums and interest rates, saving them thousands in the long run. Plus, they're usually approved for higher amounts when they take out a loan or open a credit card.
A high credit score also gives you more options when buying or renting a home (plus, it might put your application ahead of the competition). Some companies also check credit history during the hiring process, meaning your score could even help you land your dream job.
How to get the highest possible credit score
By now, you know why a high credit score is great for your finances. So, how exactly can you get a perfect score?
Having low credit is as stressful as it is frustrating. Even if your credit score is below 579, don't stress out just yet. Whether your score is brand new or needs a boost, there are ways to improve it. Here are some strategies that can help you earn the highest credit score possible.
Don't miss a payment
Because payment history makes up such a big portion of your FICO score, making payments on time is an easy way to raise it. To keep yourself on track, consider setting up automatic payments or scheduling a date each month to get your payments in.
If you've missed payments in the past, you can still achieve your dreams of perfect credit. Typically, late payments will drop off your credit report after about 7 years. Start paying on time today and you should see a noticeable difference in your score in about 6 months.
Minimize credit use
Just like your payment history, the amount of credit you use has a big impact on your overall score. To keep your utilization rate low, it's a good idea to minimize credit use whenever you can.
Lowering your rate can be as simple as limiting the number of purchases you make with a credit card. After all, the less credit you use, the less you have to pay back. As an added bonus, fewer purchases on credit means smaller monthly payments, which may keep you from missing deadlines.
Reducing debt can also improve your score in this area because it lowers your amount of outstanding credit. To do this, consider building a strategy to tackle current debt or adopting some habits to keep yourself debt-free.
Remember how hard inquiries can lower your credit score? Minimizing these is a good way to keep it from dropping. However, this is a delicate balance to strike because opening a new line of credit could give your score a boost.
Generally, it's best to avoid too many hard inquiries in a short period of time. Instead, apply for more credit only when you need it.
Keep up with old accounts
It can be tempting to close an old credit account, especially if you don't use it like you used to. Unfortunately, this can do more harm than good to your score.
In fact, closing accounts could cause your score to drop dramatically. This is particularly true if they have large credit limits, as eliminating these will drive your overall utilization rate up.
Plus, keeping old accounts open is a good way to increase your credit history length. As time goes by, that card you opened 10 years ago could be what pushed you to your highest credit score yet.
Credit scores: the bottom line
Now that you're well-versed in the world of credit scores, you know that 850 is the highest score according to the FICO model. Whether your score is currently 799 or somewhere below 579, it's possible to raise it with the right strategy. Start making healthy financial decisions today, and you'll be one step closer to perfect credit—plus the bragging rights that come with it.
For more financial guidance, visit Varo today. While you're there, sign up for a Varo Bank Account made easy with no monthly fees or minimum balance, and explore the Varo Believe Credit Card, which can help you start building your credit with every purchase¹.
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