Published in: Credit Cards | Dec. 10, 2018

How to Achieve a Perfect Credit Score

What do people with perfect or near-perfect credit do that you don’t?GettyImages-1031394114 Image source: Getty Images

The average FICO® Score is about 700 and consumers with scores in the 800s are widely considered to have exceptional credit. However, this is rather common -- an estimated 23% of U.S. consumers have scores of 800 or higher.

On the other hand, perfect credit is a rare achievement. According to Fair Isaac Corp, the company that operates the FICO® scoring model, only about 1.4% of U.S. consumers have perfect FICO® Scores. Part of the reason there are so few perfect scores is that it’s tough to figure out the exact combination of factors that will result in the elusive perfect FICO® Score. With that in mind, here’s what we know about perfect (and near-perfect) credit scores, and whether anyone really needs a perfect FICO® Score or not.

What is a perfect credit score?

The FICO® credit scoring model is considered to be the industry standard, as it is used in more than 90% of consumer lending decisions.

FICO® Scores range from a minimum of 300 to a maximum of 850, with higher scores being better. So, a FICO® Score of 850 is considered to be a perfect credit score.

The FICO® credit scoring formula

The FICO® Score is made up of five weighted categories of information. In order from most important to least, they are:

  • Payment history (35% of your FICO® Score) -- Do you pay all of your bills on time? The answer to this question is the single largest factor in your FICO® Score.
  • Amounts owed (30%) -- How much of your available credit lines are you using? How much do you still owe on installment loans, relative to their original balances? These are some of the items included in this category.
  • Length of credit history (15%) -- This includes a variety of time-related factors, such as how long ago you opened your oldest account, the ages of your individual credit accounts, and the average age of all of your accounts.
  • New credit (10%) -- There are two main credit factors in the “new credit” category. First, it includes the new credit accounts you’ve recently opened (if any). Second, it includes credit inquiries -- that is, the times you’ve applied for credit -- within the past 12 months.
  • Credit mix (10%) -- The FICO® formula also considers the different types of credit accounts you have. The rationale here is that a consumer who has demonstrated the ability to manage several different account types responsibly (mortgage, auto loan, credit card, student loan) has done a better job of demonstrating creditworthiness than one who has only used a single type of credit.

How to get a perfect score

While we certainly have a broad idea of the information that contributes to our FICO® Scores, the precise FICO® formula is a well-guarded secret. In other words, we can’t say what kind of impact any one specific credit behavior will have. So, there’s no way of knowing a precise set of steps to follow to achieve a perfect credit score.

While we don’t know the precise FICO® formula, and therefore can’t say exactly what is required for a perfect score, we do know some of the credit behaviors of those in the highest credit tiers.

According to the most recent data on FICO® “high achievers,” we know that about 23% of U.S. consumers have FICO® Scores above 800, which is generally considered to be exceptional credit. Here’s some of what we know about how people in this group behave:

  • They opened their oldest revolving credit account more than 25 years ago and their average revolving credit line is nearly 12 years old. Since “length of credit history” is a factor in the FICO® formula, this shouldn’t be too surprising.
  • It’s been nine months since the last inquiry on a high achiever’s credit report.
  • 95% of consumers with FICO® Scores above 800 have no delinquent accounts on their credit report.
  • They have an average revolving balance of $1,446 and have 10 active revolving accounts.
  • However, this makes up just 4% of their overall revolving credit limit. In fact, the average 800+ FICO® consumer is using no more than 10% of any one revolving account.

These behaviors can get you an excellent credit score, but you really need an ideal combination of factors to get a perfect score. And it’s difficult to say what that combination is. I’ve spoken with several people who have achieved the elusive 850 and the consensus seems to be that you’d need to have one small (but non-zero) balance on an installment loan, no recently-opened accounts, no recent credit inquiries, a miniscule balance on a credit card, and a long-established credit history, just to name a few factors.

However, to be perfectly clear, there’s no guarantee that all of these factors will result in a perfect credit score.

Do you need a perfect credit score?

Here’s the good news. There is no lender, interest rate, or credit product that requires a perfect credit score. Generally speaking, a FICO® Score of 800 is considered to be exceptionally strong and is good enough to get the best possible interest rate on whatever loan or credit line you want, and to be able to take advantage of the best credit card offers available.

The bottom line is that there’s no way to know for sure how to get a perfect credit score, but you don’t really need one either. However, by implementing responsible financial behaviors and learning from those who have already achieved exceptional (but not perfect) credit, your FICO® Score can be strong enough for any practical purpose.

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