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An excellent credit score is a FICO® Score of 800 to 850 or a VantageScore of 781 to 850.
To clarify what these different scores mean, FICO is the credit scoring system that's most widely used by lenders. VantageScore isn't as popular, but it's often the score provided by free credit score tools.
Having a credit score in this range is great for your personal finances. With excellent credit, you're likely to qualify for the top credit cards and the lowest interest rate on loans. Whether you have excellent credit and you want to take advantage of it or you're trying to get there, here's everything you need to know.
An excellent credit score is one that's in the highest credit score range. Under the FICO scoring model, it's technically referred to as exceptional credit, and it's from 800 to 850. Under the VantageScore model, excellent credit is between 781 and 850. Excellent credit isn't uncommon. According to Experian, 21% of Americans have an excellent FICO® Score and 23% have an excellent VantageScore.
There are several factors that each credit bureau uses to calculate your credit score, and understanding them can help you maintain or improve your credit. These factors are:
Of those five categories, payment history and credit utilization carry the most weight. Length of credit history, new credit, and credit mix all play a smaller role. They're still important, but not as important as the top two.
Excellent credit makes life easier and less expensive. Here are the biggest benefits of having an excellent credit score:
Your credit score is almost certainly going to play a major role in your life. That's why a high credit score is a smart financial goal.
No, you don't need excellent credit. It doesn't hurt, but a good credit score can be more than enough.
A FICO® Score of at least 720, which is within FICO's good credit score range, will get you most of the same benefits as excellent credit. You should have no trouble passing a credit check or securing low interest rates on a loan. Your credit score will also be high enough to qualify for any credit card on the market. Keep in mind that a high credit score never guarantees an approval.
The only area where a higher credit score can help is a mortgage. To get the lowest mortgage interest rates, it typically takes a FICO® Score of 760 or higher. That's still below the threshold for excellent credit, though.
If you want to increase your credit score, follow these tips:
Those rules work no matter what your current credit score is. The same advice applies to building credit whether your score currently sits in the bad credit or good credit range.
It does, however, take more work if your goal is excellent credit. You can stick to the same general rules, but it may be necessary to aim even higher with them. For example, instead of just keeping your credit utilization ratio below 30%, you could need to get it below 20%. You also might need to add a year or more to your credit history and maintain a track record of on-time payments.
Although excellent credit is nice to have, you probably don't need it. There aren't any new benefits that come along with having a FICO® Score of 800 instead of 760. But the steps you need to follow for an excellent credit score are smart financial habits regardless. Whether you end up with excellent credit or not, they'll get you a credit score high enough for everything you need.
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