Aiming for a perfect credit score might seem like you're trying to attain the unattainable, but hitting the coveted 850 FICO score isn't impossible. A dedicated few find a way to obtain it by taking such steps as acquiring and maintaining good financial behaviors, monitoring their credit, and using only a small percentage of their available credit each month.
Approximately 0.5 percent of consumers reach the 850 mark, according to a 2010 estimate by the Fair Isaac Corporation, creator of the widely used FICO credit scores. Although chances are slim of climbing to the top of the 300 to 850 range, there are many people who have made it over the 800 hump. In fact, FICO released a report in April that found 18.3 percent of consumers have a score in the 800 to 850 range—the highest percentage since October 2008.
John Ulzheimer, president of consumer education at SmartCredit.com and a former FICO employee, says high scorers approach credit differently than mid- and low-range scorers. For starters, they're not intimidated by it. "They look at credit more as something that's under their control, versus something that's controlling them," he says. "That's how credit should be used, rather than to keep up with the Joneses."
Barry Feldman, a pharmacist in Boca Raton, Fla., has an 820 FICO score, which took years to procure and requires significant work to maintain. Keeping unused credit accounts open and resisting credit card offers that come in the mail are two of his strategies for sustaining his high score. Feldman says the ability to receive better interest rates, such as for auto leasing and his home mortgage, is one of the best benefits he enjoys due to his high FICO score.
The rewards of an 800-plus credit score go beyond mortgages and auto loans, says Al Bingham, author of The Road to 850 (Proven Strategies for Increasing Your Credit Score). "It's a very powerful three-digit number," he says. He says two lesser-known areas where a person's credit score plays a role are how insurance premiums are calculated and whether a job seeker gets hired, since an estimated 47 percent of U.S. employers conduct credit background checks on job candidates. However, employers can't actually see a person's credit score. They can receive a copy of a job applicant's credit report to view their credit history, but a credit report does not show the person's actual credit score.
For consumers looking to join the ranks of people with exceptional credit score scores, Fair Isaac revealed new information in November about the characteristics of credit-score "high achievers." According to the report, those with scores greater than 750 exhibit similar credit habits. They use 7 percent of their available revolving credit, their oldest credit account was opened an average of 25 years ago, and they have an average of seven credit cards, including both opened and closed accounts. "We haven't ever released this information before," says Frederic Huynh, a senior principal scientist for FICO. "We wanted to open our kimono about what it takes to get a higher score, because there is a heightened awareness now around the importance of having good credit."
Ulzheimer advises those who aspire to join the "800 club" check their FICO score at least once a month. He says a person's score changes over a monthly cycle. By tracking their progress about every 30 days, consumers can see if their habits are working or if they need to be adjusted.
Although someone gauging their credit standing can use a free scoring tool, such as the one on CreditSesame.com and the simulator on Bankrate.com, going through MyFico.com is the only way to receive an exact FICO score (the one lenders will use). People can sign up for Score Watch, the website's credit monitoring service that costs $14.95 a month and supplies subscribers with two Equifax credit reports, which include detailed information on what factors are helping or hurting their score.
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?"