What It Takes to Get a Perfect Credit Score

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Fewer than 1% of American consumers have a perfect FICO credit score, but that doesn't mean it's impossible. However, a perfect credit score requires a thorough understanding of the FICO scoring model, as well as a deliberate combination of good debt and credit behaviors that show lenders what a low credit risk you are.

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Here's what a perfect credit score is, and what you might need to do in order to achieve it.

What is a perfect credit score?

There are several different credit scoring models, but the FICO model is used by the vast majority of lenders, so it's the one you should really worry about if you want perfect credit.

FICO scores range from a low of 300 to a high of 850, with most consumers between 500 and 800. Higher scores are better, so a FICO score of 850 is considered to be perfect. The national average FICO score is 700, and any score above 800 is generally considered to be exceptional credit.

It's also worth mentioning that a separate FICO score can be calculated from each of your three credit reports (Equifax, Experian, and TransUnion). Different lenders use FICO scores from different credit bureaus, so in order to have "perfect credit," you'll need to achieve simultaneous 850s from all three.

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In addition, there are industry-specific FICO scores, intended specifically for purposes such as auto lending, that have a slightly broader range of 250-900. However, for our purposes, we'll stick to the standard FICO scores.

Where FICO scores come from

The exact FICO scoring formula is not public information, but the general methodology is. Specifically, we know that there are five weighted categories of information that make up your credit score:

  • Payment history (35% of your score): Do you pay all of your bills on time?
  • Amounts owed (30%): This category considers your current credit account balances, as well as how much of your available credit you're using.
  • Length of credit history (15%): This considers various time-related factors, such as the age of your oldest account, the age of your individual accounts, and the average age of all of your accounts.
  • New credit (10%): This considers credit inquiries, as well as recently opened accounts.
  • Credit mix (10%): Since lenders want to know that you can manage a variety of credit accounts, so the mix of different types of credit you use is a factor. According to FICO, however, this factor is usually not too important unless you don't have much else on your credit report.

How can you get a perfect credit score?

If you achieve a perfect 850 credit score, it tells lenders that there is virtually no credit risk involved with lending to you. So, if you want to pursue the elusive 850, your financial behaviors in the five FICO categories should be made with the intention of demonstrating this fact.

The first category is pretty self-explanatory. If you want a perfect score, pay all of your bills on time every month. If you have any late payments, collection accounts, charge-offs, or unpaid judgements on your credit report, you can be pretty sure you won't have perfect credit until they drop off.

It's a common myth that in order to get perfect credit, you shouldn't have any credit card balances at all. On the contrary, the evidence points toward a small balance as the best bet. In fact, the average FICO high achiever (800+ FICO score) uses 4% of their overall revolving credit limit. There's some debate over whether you need to carry a balance to achieve a perfect score or not, but my point is that high achievers tend to have a small balance on their credit report.

Length of credit history is an area where there's no quick fix other than to stop applying for new credit and allow your accounts to age. The average revolving credit account of a FICO high achiever is almost 12 years. And fewer than 35% of high achievers applied for credit at all within the last year (note: only credit inquiries from the past year are considered in scores.) So, if you want perfect credit, only apply for credit if you absolutely need to.

Do you really need a perfect credit score?

A perfect credit score will get you bragging rights, but there's really no practical reason you need to pursue a perfect 850. There is no lender, credit card, or other financial product that requires a FICO score of 850 for approval, or anything close to it.

In fact, most creditors will give their best credit card products and loan interest rates to consumers who have FICO scores of 760 or higher. FICO itself has called consumers with scores of 800 or above "high-achievers," and this group has also been referred to as "super-prime."

For practical purposes, it makes sense to consider a FICO score of 800 or above to be perfect credit, as it will allow you to qualify for anything you want to buy, and you'll have some wiggle-room to absorb a credit hit (from a new account or inquiry) and remain in the top credit tier.

However, if you're set on achieving a perfect score of 850, doing so is not impossible. With the right combination of smart financial behaviors, you may be able to achieve a perfect credit score of your own.

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Matthew Frankel has no position in any of the stocks mentioned. The Motley Fool recommends Experian. The Motley Fool has a disclosure policy.