by Maurie Backman | Updated Sept. 21, 2021 - First published on Feb. 23, 2019
Many or all of the products here are from our partners that pay us a commission. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
Perfect credit is extremely hard to come by. The question is: Is it really necessary?Image source: Getty Images.
During my grade school days, I was often tempted to strive for perfection by scoring 100 on tests. As an adult, I took that concept one step further by aiming for a perfect credit score.
Credit scores can range from as low as 300 to as high as 850, and at one point, I took pride in the fact that I actually managed to achieve the latter end of that range. That pride, and score, however, were short-lived, and it taught me a valuable lesson: Perfect credit isn't easy to come by. It's also not necessary.
Tips and tricks from the experts delivered straight to your inbox that could help you save thousands of dollars. Sign up now for free access to our Personal Finance Boot Camp.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.
There are several components that go into determining a credit score, some of which carry more weight than others. Here's the breakdown:
If you manage to hit all of the above points in unison, you might achieve a perfect credit score for a few days, weeks, or maybe even months. But few adults manage to maintain a perfect credit score for the long haul.
For one thing, you might reach a point in your life where you need to apply for new credit accounts. Doing so could ding your score temporarily in that arena, thereby dragging your otherwise perfect number down.
Furthermore, keep in mind that there are three major bureaus that track credit -- Experian, TransUnion, and Equifax. Some lenders report into all three bureaus, and some don't. As such, part of your payment history might be missing from one bureau, or several, thereby causing your score to dip. It's also possible for you to have a perfect credit score from one bureau, and a lower score from another (though the chances of you having a superb number from one bureau and a terrible score elsewhere are pretty slim).
The punchline: Maintaining perfect credit is something even the most financially responsible folks often can't do. So rather than fixate on that 850, aim to keep your score as high as possible. Paying your bills on time consistently is probably the single most important thing you can do to maintain good credit. After that, keep your utilization low. This means that if you have a total line of credit in the amount of $10,000, aim to never have more than $3,000 worth of charges outstanding at once.
Keeping old credit accounts open is another good way to boost your score. Hang onto that old credit card you never use anymore but have had since your teenage years it if it isn't costing you an annual fee. Similarly, avoid applying for too many new credit cards at once, and aim to have a healthy credit mix (meaning, not just store cards, but rather, a variety of credit accounts). Doing these things will bring you as close to perfection as you're able to get without driving yourself up a wall.
Any credit score in the 800 to 850 range is generally considered "excellent," while 740 to 799 is considered "very good." Fall into either category, and there's a strong chance you'll get approved for any reasonable loan or line of credit you apply for, and at a favorable interest rate. Or to put it another way, your financial circumstances are unlikely to change regardless of whether you have a credit score of 820 versus 850.
If you want to make yourself crazy in an effort to achieve perfection on the credit score front, by all means go for it. Just know that once you attain that 850, the only thing it's really going to give you is bragging rights.
If you have credit card debt, transferring it to this top balance transfer card secures you a 0% intro APR into 2023! Plus, you’ll pay no annual fee. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt. Read The Ascent's full review for free and apply in just 2 minutes.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2021 The Ascent. All rights reserved.