Why a Perfect Credit Score Is So Hard to Achieve

by Maurie Backman | Updated July 21, 2021 - First published on Feb. 18, 2020

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It's not easy to have a completely clean credit record.

Credit scores range from a low of 300 to a high of 850. Anything below the upper 500s is considered poor, and if your credit score falls in the 300 to 550 range, your chances of getting approved for a loan, or at least one with a favorable rate, are pretty slim.

By contrast, once your credit score hits the mid-700s, it's considered very good, which opens up your borrowing options significantly. And if you manage to get your score above 800, it's considered exceptional. 

But even if you make a concerted effort to bring your credit score up to the maximum of 850, you may find that you're unable to hit that goal. In fact, only 1.2% of Americans had a perfect credit score in 2019, reports Experian, so if you've been struggling to snag that 850, you're clearly in good company. 

How are credit scores calculated?

There are five factors that go into calculating your credit score:

  • Payment history, which speaks to how timely you are with paying your bills
  • Credit utilization, which measures how much of your available revolving credit you're using at once
  • Length of credit history, which shows how long your credit accounts have been in good standing
  • New accounts, which speaks to the number of accounts you open at once
  • Credit mix, which describes the different types of debt you have

Some of these categories carry more weight than others. But getting all of them just right is easier said than done, which is why it can be a struggle for many consumers to achieve a perfect credit score.

Why perfect credit is so hard to achieve

For example, you might make every bill payment on time for several years, maintain a favorable credit utilization ratio, have several open credit accounts in good standing, and juggle a healthy mix of debts -- say, a mortgage, an auto loan, student loans, and a couple of credit cards

But if you apply for a new loan, your lender will need to pull your credit record to see if you're a responsible borrower. That's known as a hard inquiry, and it can drag down your score ever so slightly. Apply for new accounts often enough, and that alone will stop you from having perfect credit. 

Similarly, if you decide to close a credit card you've held a while because it charges an annual fee and you don't really use it, having that account removed from your credit history could lower your score, preventing you from reaching 850. 

Another thing to keep in mind is that each of the three major credit bureaus -- Experian, Equifax, and TransUnion -- calculates its own score for you. As such, you might manage to achieve perfect credit with one bureau, only to have a slightly lower score with another.

Don't get too hung up on perfection

Although you may think that a perfect credit score gives you bragging rights, the reality is that once your score climbs above 800, it almost doesn't matter whether you're looking at 810, 820, or 850. Any score above 800 is considered outstanding, and if your score is that high, you'll generally qualify for the best rates out there. 

Now, that isn't to say that you can't try to get your score up to 850. But don't drive yourself crazy in an effort to get there. You're much better off focusing on being timely with your bills, keeping your outstanding debt low, and making other smart financial decisions that help you in the long run.

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