How to Get an EXCELLENT CREDIT SCORE | 800+ at 25 Years Old
Having an excellent credit score is one of the most important steps you can take to ensure a healthy financial future. A good credit score can open up a world of opportunities, from getting approved for a loan to accessing the best interest rates and terms. In this article, we’ll explore what you can get with excellent credit and how to maintain your credit score.
First, let’s look at what is considered an excellent credit score. Generally speaking, a credit score of 720 or higher is considered excellent. This score is based on a variety of factors, including your payment history, credit utilization, and the length of your credit history.
When you have excellent credit, you’ll be considered a low-risk borrower by lenders. This means you’ll have access to more favorable interest rates and terms when applying for a loan. Plus, you’ll have more access to credit cards with higher credit limits and lower interest rates.
You’ll also get approved for more types of loans. From auto loans to mortgages, lenders view applicants with excellent credit as a safe bet and are more willing to offer favorable terms.
Finally, your excellent credit score can help you save money in the long run. When you have excellent credit, you’ll be able to take advantage of the best interest rates and terms available on loans and credit cards, saving you money over time.
• An excellent credit score is generally considered to be 720 or higher.
• With excellent credit, you’ll be viewed as a low-risk borrower and have access to more favorable interest rates and terms.
• You’ll also have access to more types of loans and credit cards with higher limits and lower interest rates.
• Your excellent credit score can save you money in the long run.
People Also Ask
Q: How can I maintain an excellent credit score?
A: To maintain an excellent credit score, make sure to pay your bills on time and keep your credit utilization below 30%. Additionally, check your credit report regularly for any inaccuracies or fraudulent activity.
Q: What is the highest credit score?
A: The highest credit score is 850. This score is based on the FICO scoring model, which is the most widely used scoring model in the US.
Q: How long does it take to build excellent credit?
A: It typically takes about 6-12 months to build excellent credit. However, it can take longer depending on your individual credit history.
What Can You Get With Excellent Credit – Whats The Best?
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Today I’m going to be giving you some tips and tricks on getting a perfect credit score. I break down 5 different categories that play a role in your overall score and give advice on how to score highly in each category. As I always say, I’m not a financial professional, but having an 813 credit score at the time of this video, I feel like I have something to share.
1.) ON-TIME PAYMENT PERCENTAGE – 35% OF CREDIT SCORE
Basically, this is just an overall percentage of how often you pay your credit payments on time. Anything less than 97% is considered really bad for your credit, anything above 99% is going to be pretty good. Ideally, your on-time payment percentage would be perfect at 100%. Having more credit cards is good because the more payments you make and the more history you have, the less 1 missed payment is going to negatively effect your score. Making the minimum payment still counts as making a payment on time!
– NEVER miss a payment
– Have multiple credit cards and build up history
– Utilize the minimum payment if necessary
2.) CREDIT UTILIZATION RATE – 30% OF CREDIT SCORE
Whenever you get a credit card, you also get a credit limit for that card that limits how much credit you can use at one time. Credit utilization is the percentage of your overall credit limit that you are using at a given time. Having a credit limit of $10,000 and carrying a balance of $6,000 means you have a 60% utilization rate, which is really bad. You always want to be using less than 10% of your overall credit. You can make a purchase that is more than 10% of your credit limit, as long as you don’t carry that balance to the next month. Also, the more credit cards you have, the higher your credit limit will be.
– NEVER use more than 10% of your total available credit at once
– NEVER carry a large balance over to the next month
– Get a higher credit limit by applying for more cards
3.) AGE OF CREDIT HISTORY – 15% OF CREDIT SCORE
This is the average age of all of your credit accounts combined into one number. The longer your credit history is, the better. So get started as soon as you can! Also, don’t close out your old credit accounts, even if you’re not using them. That can bring your average age down quite a bit and end up hurting your score. I mentioned getting more credit cards earlier, and I should mention that every time you get a new card, it lowers the average age of your credit history, just like adding a newborn baby to a family lowers the average age of that family. You probably want to avoid adding a new account if you think you are going to apply for a loan in the near future.
– Get started on credit ASAP (18th birthday if necessary)
– DON’T close out your old credit accounts, keep them open!
4) TOTAL CREDIT LINES OPEN – 10% OF CREDIT SCORE
This is obviously the total number of credit lines you have open. In this case, the more credit lines the better. We talked about other benefits to having more credit lines–it gives you more credit history for on-time payments, it gives you a higher credit limit and lower utilization rates, and now, it simply boosts this category. Having a good mix of types of credit is really good too! So, if you have a mortgage, car payment, and multiple credit cards, you’re looking good!
– More credit lines = better
– Have a variety of credit types (mortgage, car payment, credit cards)
5) HARD INQUIRIES – 10% OF CREDIT SCORE
When you apply for a loan or new credit cart, the lender is going to do something called a hard inquiry to check your credit score. You don’t want to have a lot of these in a short period of time. Think of it this way, if someone sees that you’ve suddenly tried to take out a bunch of loans in a short period of time, it’s not going to look good.
– Affects score for 1 year, stays on report for 2 years
– Plan ahead and don’t get too many inquiries in a short time
EXTRA: DEROGATORY MARKS ARE A BIG NO-NO
Derogatory marks are when you have a debt sent to collections or have a property foreclosed on you. These are really bad for your credit and you want to avoid them if possible. If this has already happened to you, see if you can consult someone and get it off of your record.
BONUS TIP / CREDIT SCORE LIFE HACK: CREDIT PIGGYBACKING
Credit piggybacking is when you become an authorized user on someone’s credit account that they have really good history on. When you become an authorized user, then all of that history can show up on your report! That means you could instantly add 5 years of on-time payments to your report for example. Make sure you can trust the person you do this with, and that the account is with Capital One, Discover, Bank of America, or Wells Fargo. Please build your own credit too, but this is a really solid strategy that could instantly boost your score a lot.
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