How to Get an 850 Credit Score

If you’re looking to improve your credit score, achieving an 850 is the ultimate goal. This perfect score means that lenders and creditors know you are a safe bet and will be more likely to approve you for a loan. But is an 850 credit score even possible? Let’s take a look at what it takes to get there and the many benefits of having such a high credit score. 

---

If you are working on building up your credit or improving your credit score, MoneyLion is here to help! MoneyLion offers a free and convenient way to find offers from our trusted partners to help you improve your credit — such as credit monitoring, credit report disputes, and getting credit by paying bills. A good credit score can lead to lower interest rates and increased borrowing power on loans and credit cards. 

---

Is it possible to get an 850 credit score?

A perfect credit score is usually considered to be a FICO score of 850, the highest possible score available. According to FICO, only 1.6% of the population has an 850 credit score. It’s incredibly tough to get there, but reaching an 850 score is possible.

The first step in achieving an 850 credit score is understanding how the process works. Your credit score is determined by five factors, all of which have different weightings assigned to them. The factors are payment history (35%), the amount owed (30%), length of credit history (15%), new accounts (10%), and types of accounts used (10%).

Why you should strive for a good credit score 

The higher your credit score, the more reliable and trustworthy you appear to lenders. Earning such an impressive score takes careful business practices over time that include paying your bills on time and in full, keeping your balances low, and being aware of how to use different kinds of credit responsibly. These steps may seem small, but they can eventually add up to create the chance to earn a perfect credit score when used effectively.

Lower interest rates

The higher your credit score, the lower your interest rates on credit cards, mortgages, and auto loans will typically be. A low-interest rate might save you thousands of dollars over time. 

Many lenders will charge customers higher interest rates if their scores are below a certain threshold to protect themselves from potential defaults on payments. Perfect scores can save borrowers money by helping them avoid higher interest rates and other potentially avoidable fees

Higher credit limit

Credit card issuers assess your credit score when deciding to raise your credit limit. A higher credit limit lets you borrow more money and can enhance your credit score even more. That’s because a higher credit limit improves your credit utilization ratio. This ratio makes up 30% of your credit score. Good credit utilization can make it easier to get higher loan amounts and better interest rates.

Easier financing

Your credit score can determine your loan eligibility. With a low credit score, you may not qualify for certain types of financing. Obtaining financing can be much easier when you have a perfect credit score, as lenders are more likely to trust customers with the highest possible score. 

Better approval rates for rentals

When renting, landlords usually look at a potential tenant’s credit score to decide whether they are likely to pay their rent in full and on time. An 850 credit score shows that the applicant consistently pays their bills and debts and will be more likely to receive preferential treatment from landlords when compared to applicants with lower scores. They may also be able to negotiate lower rental rates on certain properties because of their established trustworthiness as a reliable tenant.

Negotiate lower interest rates on existing debt

An 850 credit score can open up many opportunities for better terms on existing debt. A perfect score proves that the borrower has been responsible financially over long periods of time, which builds trust between borrowers and lenders. With this trust comes greater negotiation power when discussing financial matters such as renting or repaying debt, allowing those with high scores to potentially receive more favorable outcomes than those with average or poor scores.

Better approval rates for top credit cards

You’ll have a much better chance of getting approved for a top credit card with a perfect credit score. 

Credit card companies tend to offer top-tier benefits and the lowest interest rates to people with excellent credit scores, making it much easier for those individuals to take advantage of these offers. In some cases, depending on the institution providing the loan or credit card, having a good credit score might even result in increased rewards and other perks not available for people with lower scores. 

Consumers who maintain a perfect credit score are usually entitled to exclusive offers and deals that don’t extend to those with lower scores. This could mean anything from additional points and miles earned through spending on products or services offered by certain vendors to exclusive invites to events. 

---

Explore credit card options tailored to different needs and preferences.

---

Factors that make up a credit score

Your FICO score consists of five components. Working on each of these factors can lead to a higher credit score.

Payment history

Payment history is the largest factor in your FICO score, making up 35% of the total number. Making on-time payments for your financial obligations will help you preserve a good payment history. You only have to make the minimum payment to improve your payment history, but the next factor demonstrates why it is a good idea to make more than the minimum monthly payments.

Credit utilization

Credit utilization makes up 30% of your credit score. This ratio measures the money you have borrowed against your credit limit. For instance, if you have borrowed $1,000 against a $5,000 credit limit, you have a 20% credit utilization ratio. That is a good number that will improve your credit score. Credit utilization ratios below 30% help your score, but you will get the best results if your credit utilization ratio is below 10%.

Length of credit history

The length of your credit history makes up 15% of your credit score. Keeping older credit cards open will improve your score since they indicate you have more years of experience. Creditors feel more confident working with consumers who have plenty of experience with managing debt and making on-time payments.

Credit mix

Credit mix reflects the different types of debt you manage. For instance, if you have a mortgage, auto loan, and credit card debt, you have a more diverse credit mix than someone who only has credit card debt. Credit mix makes up 10% of your credit score. You shouldn’t take on various types of debt just for the sake of credit mix.

New Credit

This component makes up 10% of your credit score. If you don’t apply for new credit, your score will be fine. However, any hard credit inquiries will reduce your score by a few points. Hard credit checks are easy to recover from, but you don’t want to apply for too much credit at one time.

How to get a perfect credit score

Reaching a perfect credit score takes consistent effort, but you can take some simple steps to start down the path toward success. 

Pay bills on time

Because your payment history accounts for 35% of your score, you should never miss a payment. Even a single late payment could have lasting credit consequences and could drop your score significantly. You can set up automatic payments to ensure you don’t forget to make payments. Creating a budget can help you have enough funds to cover automatic payments and improve your credit score in the process.

Lengthen your credit history

Keeping old accounts open can work wonders for your credit score. Even if you don’t intend on using an old credit card for new purchases, you can add one monthly or annual subscription to the card so it stays active. 

Pay off your balance in full

Aim to pay your balance off in full each month. Paying off your balances keeps debt from piling up and helps lower your risk of getting in over your head. 

Work toward paying down existing debt

Paying down debt should be a priority because it will lower the amount owed and help keep your payments up to date. 

Paying off existing debt also helps to create financial freedom and flexibility because it limits your monthly expenses to just what is absolutely necessary each month. This practice can allow you to build cash flow and savings more quickly instead of having to make large payments toward debt each month, which leaves less money available for other needs. 

Keep your credit utilization rate low

Experts suggest using no more than 30% of your available credit and the lower, the better. Strive for a 1% percent utilization if you want an 850 credit score. 

Diversify credit mix

It’s important for credit scores to reflect not only the amount of debt held but also the types of debt. This type of analysis allows lenders to understand the level of risk associated with extending financing or other services to someone.

The most common combination for perfect credit is a mix of revolving accounts (credit cards) and installment accounts (student loans, car loans, mortgages). This combination shows you have experience managing short-term obligations such as credit cards and longer-term commitments that require regular payments over time, like student loans. Ideally, this mix should also include a diverse range of accounts from different institutions; having several creditors shows you have been successful in securing financing from many sources. 

Don’t apply for more credit too often

Although you want to strive for a good mix of credit, a new account can temporarily cause your score to dip. New accounts lower the overall age of your credit. You’ll also want to avoid too many inquiries. Although a single inquiry doesn’t have a big impact, multiple inquiries can add up. 

Avoid closing old credit accounts

Closing old credit accounts will hurt your score since these closures impact the length of your credit history. If you are applying for a mortgage or another significant loan soon, you should keep old accounts open, even if you have to pay an annual fee.

If you have all of the important loans you need, it can make more sense to close an old credit account. You should only consider closing an old credit account if the annual fees are excessive and you won’t need an important loan anytime soon. However, if the old credit account doesn’t have an annual fee, it doesn’t make sense to close it.

Review your credit score and reports

Don’t forget to check your account regularly for errors or inaccuracies that could be affecting your score negatively. Experts recommend checking your credit report at least once a year. If you see any discrepancies, file a dispute directly with each bureau. 

The Journey to an 850 Credit Score

An 850 credit score is possible with commitment and dedication. When achieved, this perfect score may bring with it many benefits, including lower interest rates on loans, easier financing options, better negotiating power when dealing with existing debt, and access to exclusive rewards programs from major banks. While reaching an 850 may seem like a daunting task, remember that every small step taken now can lead to big rewards down the line.

Even if you’re unable to reach the perfect score, improving your credit score can have a big impact on your overall financial health.

FAQ