Only about one percent of Americans have a FICO score of 850, or perfect credit. There is a bit of luck involved in obtaining the perfect credit score. Having a perfect credit score can open many doors for you.
Your credit score can make home financing easier, or your credit score can make opening your dream business a reality. Basically, getting a perfect (or near perfect) credit score can change your life, from a better choice to one business banking to better options when taking out a business loan. The good news is, the path to a phenomenal credit score is no mystery.
A study of individuals with perfect credit scores showed a strong correlation between a FICO score of 850 and a number of factors.
Some of the factors that influence credit scores make sense, while others may seem less than intuitive. Variables that are often equated with a perfect credit score are as follows:
- Ownership of between four and six credit cards
- Ownership of at least one mortgage or auto loan in good standing
- Ownership of multiple accounts with a long history of positive usage; usually an account that has been in use for about 20 years
- A record of about 30 years of positive credit usage
- History of multiple credit inquiries
- History with zero collections or bankruptcies
- Ownership of a credit account that has a debt level of less than 35% of the total credit limit
In short, take a healthy line of credit, pay your bills, and resist the urge to check your credit score regularly.
How To Improve Your Credit Starting Today
Getting a near-perfect credit score takes time. It’s best to start increasing your FICO score ASAP by changing bad habits and adding the necessary lines of credit to your existing accounts. Having healthy credit for life can help you save money and have more opportunities for success. Many people find business banking more challenging than just managing personal finances. It’s important to think about finances and build credit in a methodical way. As explained above, there is almost no way to get perfect credit in the next 30 days. However, you can start building a healthy FICO score right away.
1. See What Your Current Credit Report Says and Correct Misconceptions
Nearly everyone with a line of credit has been a victim of credit card fraud at some point. It’s important to make sure your credit record is clean of the fraudulent allegations that were successfully disputed years ago. Spend a short afternoon clearing up misunderstandings and dated information (eg old addresses).
2. Fix Bad Habits NOW
Find ways to ensure that you won’t make late payments or default on the loan again. People make mistakes with credit cards, and it’s important to start practicing better habits today. Find a system for paying bills on time that works for you.
3. DON’T Run Out Of Cash
Loans are not cash. Student loans are not cash. Credit cards are not cash. Only borrow an amount that you can easily repay.
Be Patient and See Good Credit Rewarded
Increasing your credit score is possible. However, it takes time, good financial practices, and self-discipline.