850 Credit Score: What It Means for You And How To Reach It
An 850 credit score is almost mythical, the pinnacle of credit scores. There is nowhere else to go, nothing else to achieve. But is an 850 credit score all it's cracked up to be, and how can you maintain an Excellent credit score? That's what we'll discuss in this, our final article in the series on credit score milestones.
Credit score ranges
These are the credit score ranges:
300 to 579: Poor
580 to 669: Fair
670 to 739: Good
740 to 799: Very Good
800 to 850: Excellent
850 credit score
If you reach an 850 credit score, you are very rare indeed! Just 1.3% of consumers achieve the perfect credit score. That 1.3% generally have a few things in common:
They're older: Most people with an 850 credit score are age 57 or older. About 70% are Baby Boomers (those aged 57 to 75) or the Silent Generation (those 76 and older). Gen X (ages 41 to 56) accounts for 22%, and those 40 and younger comprise just 4% of this rare group.
They have more credit cards with lower balances: Those in the 850 club have an average of almost six credit cards with about $2,588 in credit card debt, while the national average is $5,221. Creditors like to see credit utilization under 30% (but lower is always better), and those with scores above 800 have utilization around just 7%.
They have less overall debt: Those with perfect credit don't just have less credit card debt than other consumers; they have less debt, period. They have below-average balances on mortgage and auto loans.
Reaching an 850 credit score
You don't need to. That may seem like odd advice when our product helps build credit, but personal finance can be stressful, and there is no need to add further stress by chasing a perfect credit score. And you don't need an 850 credit score. As long as your score is above 760, you'll typically qualify for the best credit cards and loan terms. There really is no additional benefit to striving for a perfect score.
And even if you do manage to obtain an 850 credit score, it will probably be fleeting. Credit scores fluctuate a lot for various reasons, not all of them bad. You might make a large purchase on a credit card that you pay off before the due date, but the card issuer reports to the credit bureaus before that due date. That can increase utilization and lower your score.
Once you reach a 760 score, just continue doing what you did to get there:
Make payments on time
Keep utilization low
Don't close credit card accounts
Occasionally monitor your credit score for drastic changes and your credit report for incorrect information
Rather than focusing on your credit score, concentrate on other financial goals like saving for a home, education expenses, or retirement. You worked hard to achieve an excellent credit score; you can take a break now! Congratulations on your success, and we hope Upwardli had a small part in it!