What Is an Excellent Credit Score and How Do You Get One?
Having a good credit score is crucial if you ever hope to be approved for credit cards or loans without sky-high APRs. Ranging from 300–850, the three-digit number proves to lenders and credit card companies that you are a trustworthy borrower who will pay back your debts in full. The higher the number, the higher your creditworthiness. But what’s the difference between a “good” credit score and an “excellent” one? Is excellent even achievable if you don’t have much of a credit history, or if you hit a rough patch in your financial past? Here is what you should know about excellent credit score status and the steps you can take to bring you closer by improving your credit score.
What Is an Excellent Credit Score?
What is a high credit score — and is it even achievable? Depending on the scoring model you use, a high credit score can fall into a number of ranges, including excellent (generally 800-850), very good (740-799), good (670-739), fair (580-669) and very poor (300-579).
Transitioning into the above-average range is a manageable goal with even more benefits, such as lower interest rates on loans, better credit card offers and greater likelihood of having applications approved. Even more, once you’re at above average, excellence is within close reach.
To achieve and maintain a higher credit score, it’s important to identify the barriers that may be keeping you from your goals before diving into an action plan to achieve your future score. From delinquency on payments to the frequency of hard inquiries about your credit, a number of factors may be hurting your credit score. By taking the following steps, you can put yourself on the path toward excellence.
Avoid Accumulating Too Many Hard Inquiries
The two types of credit inquiries that may show up on a credit report are a soft inquiry and a hard inquiry. Soft inquiries can be performed by employers or a credit monitoring service. Hard inquiries are typically performed by lenders, banks or credit card companies and usually disappear from your credit report after two years. As a general rule, try to limit hard inquiries to two during any given two-year period.
Pay Your Bills on Time
Making payments on time and keeping your balances low are the two most important factors when it comes to building credit. Try to pay off your bills in full each month to avoid potential late payment fees and interest charges that often result from carrying a balance. If all you can afford are minimum payments at the moment, consider setting up autopay so you don’t miss a payment.
Lower Your Credit Utilization Rate
The “Amounts Owed” category of your credit report is the basis for 30 percent of your credit score. Your credit utilization ratio describes the relationship between your credit card balances and their limits, and lowering this ratio may have a positive effect on your credit score. In addition to paying off your credit card balances every month, asking your credit card issuer for a higher credit limit may also help.
Use the SmartCredit System
SmartCredit helps you optimize your credit score with actionable tools. Beyond ScoreBuilder showing you what is hurting your score and helping it, ScoreTracker allows you to track your score, and ScoreMaster allows you to pay down debt with a personalized strategy. Use SmartCredit to find out which accounts are causing the most problems, negotiate debts and know the optimum time to apply for new lines of credit. The personalized action plan is devised to achieve your best possible score in as little as 120 days*.
Learn more about how SmartCredit can help you achieve your best credit score and bring you one step closer to excellence.
**This feature unlocks if you have negative credit data.