Even people who discover they have a poor score shouldn't lose hope of joining the ranks of high scorers, according to Lynnette Khalfani-Cox, author of Perfect Credit: 7 Steps to a Great Credit Rating. "I've known people with severe blemishes on their credit—bankruptcy, foreclosure—but the most important thing is what they do after they experience a financial calamity," she says.
Michael Krynski, a software engineer in Chicago, encountered such a financial roadblock. During college he only used a debit card, so he didn't have the chance to establish credit. And it was only after finishing graduate school that he realized he had failed to pay a utility bill, which dropped his score dramatically. By the time he wanted to buy a house, multiple mortgage lenders turned him away due to his subpar credit score, which was hovering around 540.
Determined to raise his score, Krynski purchased a car with an auto loan and opened new credit cards. "I focused all my spending on the new credit cards and always paid at least half the balance each month to maintain a good ratio," he says, adding that he has kept up these practices over the past 18 months. Krynski's diligence has paid off: His FICO score is now approximately 760. However, he says he is still pushing to surpass the 800 mark.
While many people like Krynski are looking to move from the mid-700s to what they perceive as the "golden" 800s, lifting their score won't likely lead to better interest rates. Liz Weston, author of Your Credit Score: How to Improve the 3-Digit Number That Shapes Your Financial Future, says 740 is typically the score a person needs to qualify for the best credit card rates, auto loans, and home mortgages. "There's no reason to have a perfect 850 other than bragging rights, and you won't keep it for long anyway, since your scores are always changing," he says.
Consequently, Ulzheimer says shooting for a perfect or near-perfect credit score isn't the best approach. "There comes a point where your strategy has to really shift from score improvement to score maintenance," he says. He and other credit experts say it's easier to lower an 800 than it is to improve it.
Consumers with an 800 or higher credit score should be content, Weston says, as gaining bragging rights are arguably the only benefit of climbing to the top of the ladder. She says telling a friend you have an 830 FICO score will likely yield limited praise: "How lovely for you. How about them Dodgers?"