Credit scores, also known as FICO scores (Fair Isaac Corporation), are a way to measure your creditworthiness. Vantage scores are similar to your FICO credit score. The newest version also uses a range of 300 to 850, just like the FICO system. There are three main credit bureaus Experian, TransUnion, and Equifax are the ones a company will use to determine your eligibility.
Is it good to have an 800 credit score?
When you apply for a loan, credit card, rent an apartment, or sign up for insurance, they’re used by lenders. An 850 credit score is the highest possible rating and means that you have excellent credit. To earn an 800 credit score, you’ll need to maintain good payment history, avoid high-cost loans, and avoid borrowing from the same lender too often.
Credit Scores indicate your ability and can demonstrate how seriously you take paying back borrowed money.
Education is one of the most important aspects of our lives. We spend years in school learning about the world around us and preparing for our future. The problem with most education is it doesn’t give students a plan or the real-world content they need to be successful financially. It’s not hard to start educating yourself on building your credit. It just takes action.
Is it hard to get an 800 credit score? No, it’s not hard but it will take some effort on your part. In our guide use the tips provided and you will have a jump start.
What are the benefits of having a high credit score?
A high credit score can have many benefits. It can help you get approved for a loan, allow you to obtain a lower interest rate, and may even lead to a higher salary. A high credit score can also make renting an apartment or buying a car easier. Lenders look at credit scores to determine the likely hood that you will pay the loan back. In addition, landlords look at it to determine if you will pay rent on time.
When looking at your score, they measure risk. You get charged more for a lower score due to the borrower’s risk of not paying on time or how likely you are to default on a loan.
So the first benefit of having an 800 score is you will pay less than someone who has a low score.
Another benefit is better credit card offers:
There are many different types of credit cards on the market, and consumers have a lot of choices when it comes to finding the right one for their needs. However, not all credit cards are created equal, and some offers are better than others.
The best credit card offers usually come with a low-interest rate, no annual fee, and various rewards and benefits. Some cards also offer 0% APR introductory rates, which can be helpful for people who are looking to finance a large purchase or transfer a balance from another card.
You won’t receive these excellent credit card offers without a perfect credit score. These great credit card offers can be used to accelerate your goal of reaching financial independence. We will go more into detail on how to accomplish this in another article. Using these offers can accelerate those Earn Save Retire goals.
Get approved for loans more easily:
Borrowers looking to get approved for a loan more easily can improve their chances by having a great FICO and Vantage Score. Lenders look at this number to gauge how risky it would be to lend money to you. So if your credit score is low, work on improving it before applying for a loan.
Next, make sure you have a steady income and that your debt-to-income ratio is low. Lenders want to know that you can afford to repay the loan, so having a high debt-to-income ratio will make it more challenging to get approved.
Finally, be prepared to provide documents that prove your income and identity. Having all the required paperwork ready will help speed up the approval process.
The recurring theme here is paying down debt. By doing this, you will easily qualify for a home mortgage, and as you pay down your debt ratio, your credit score will improve. It’s not easy getting over an 800 credit score, but you can do it.
An 800 credit score will help you save thousands of dollars, especially on bigger ticket items like cars and homes. Saving thousands puts you well ahead of many people trying to reach financial independence.
How to start building a solid credit score
A good credit score is essential when you want to buy a car or a house or when you need to borrow money. A high credit score means you’re a low-risk borrower, so lenders will be more likely to give you a reasonable interest rate on loan. Conversely, if your credit score is low, it can be harder to qualify for an approved loan or get a good interest rate.
You can do several things to improve your credit score.
First, make sure you’re on top of your payments. Pay your bills on time every month and don’t carry too much debt. On-time payments are one of the biggest factors to attaining that 800 credit score. Having a bankruptcy or accounts sent to collections will hurt your scores.
Second, Improving credit usage is an essential factor. Try to keep your credit utilization ratio low. Keeping high a high credit card balance compared to your credit limit will bring your score down. This is the percentage of your available credit that you’re using at any given time. You can check your credit utilization ratio by looking at your credit report.
Third, Length of credit history length, and unfortunately, resolving this one may take time. The average age of your credit accounts comes into play. That is the reason you might not want to close your accounts. Closing an older account can really affect this number.
Fourth, Make sure to have a good credit mix. Again, showing you can handle the multiple lines of credit generally will give your score a boost.
- Installment Accounts – Normally, this is a car loan, mortgage, or a personal loan
- Revolving Accounts – is general credit card accounts
Someone who has paid everything off and has no history may be dragging their score down. Hence, using credit cards and HELOC loans can come into play in maintaining a high score.
Fifth, Recent credit inquiries can hurt your score. So when starting the mortgage process, the loan officer should tell you not to go out and apply for any credit. Especially don’t go out and apply for an auto loan until after your home loan has been closed. Lenders can assume a bunch of recent inquiries could mean you over-extending yourself. Inquires can quickly drop a score from 800. Getting multiple cards to extend your credit at once can have a big effect on your credit score.
What is a soft inquiry on credit? These types of inquiries don’t affect your credit scores. They are maybe a lender running a review on your credit line or maybe an insurance company pulling information to provide you an insurance quote.
Start with each of these steps and use them as a free guide on how to achieve an 800 credit score. You can improve your current situation and start reaping the benefits of a higher credit score quickly.
Feel like you need more help? You can contact a credit repair service that will be more qualified in removing derogatory items from your credit report. These services can be costly so take in mind that if you are unwilling to spend the time taking care of them then you will be spending money that could be used in other places.
A study by Experian found that people with an 800 credit score save an average of $16,319 on just the lifetime of a home loan. In addition, having a high credit score gives you peace of mind and makes it easier to manage your finances.
Getting started today on your credit and getting your score to the high 700 to low 800 will be a big step to your financial independence. That is some of the best advice that will impact everything from rates on credit, student loans, car loans, and more.
Keep reviewing your credit on a regular basis to make sure you don’t miss something that can hurt you when you need to use your credit the most. Changes to your credit report may cause you to lose your excellent credit score.