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Credit
May 20, 2020

What Is the Highest Credit Score?

Written By Jeff Hindenach
Last updated June 5, 2020

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Reader question: What’s the highest credit score? What score should I be aiming for?

Answer: 850 is the highest credit score. Truthfully, the highest credit score is not the score you should be shooting for. The whole point of a credit score is to get you the best rates and credit limits when you are applying for loans and credits. While it seems like the highest score would get you the best rates, you actually don’t even need to aim that high.

850 is the highest credit score you can get on the FICO scale. FICO uses a range of 300 to 850 to determine credit scores, 300 being the lowest. So 850 is the highest, but nearly impossible to get.

Yes, it is possible, but very hard to get. You would need to have the perfect storm of credit utilization (probably zero balances with very high credit limits), a long spotless credit history, and no negative marks on your credit report, which is nearly impossible. And even with all of those factors, 850 can still be unattainable. So what score should you be shooting for?

The perfect credit score is one that can get you the best rates and the highest credit limits. If that’s what you’re looking for, you should aim for a credit score of 760, according to FICO. Anything above a 760 is just going to be for bragging rights, since a score of 760 or above will get you the best rates and credit limits. Most businesses use similar cutoff points when determining your rate or credit limit. Say you have below a 700, you might be in a different bracket with higher rates than someone with a 705, so always make sure you are doing everything you can to keep your score as healthy as you can. Here are some tips on how you might be able to raise your credit score without any crazy tricks or scams.

 

No. An 850 credit score won’t get you any extra perks that a 760 would get you, except for maybe bragging rights. FICO set up their range to help determine how trustworthy a person is based on their credit usage, but anyone with an excellent credit score can take advantage of the best rates and perks.

About 20% of people in the US have a score of 800 or higher. Over 19% have a score of 750 or higher, and 17% have a score of 700 or higher. Almost 30% of people have a score under 600, which is considered poor.

703. This is up from an average score of 691 in 2013, mostly because the economy has been so strong in the past few years. People over 60 have the highest average score at 749, while people under 30 have the lowest at 662. Minnesota has the highest average score at 733, while Mississippi has the lowest score at 667.

We’re not talking about an 850 score, but a score that will get you the best rates and perks. Here is what determines your credit score and some tips on how you can raise it.

Payment history: This is the number one factor in determining your credit score, counting for 35% of your score. It monitors your payment history over the past seven years, marking you down when you miss a payment. This is why it’s important to always pay your bills on time. If you can keep your payment history clean, you have a good chance at an excellent score.

Amounts owed: Accounting for 30% of your credit score, this factors in how much credit you are using, employing a credit utilization ratio (CUR). Your CUR is how much you owe on your credit cards compared against your overall credit limit. The lower your CUR, the higher your credit score. So if you are sitting on credit card debt, the easiest way to bump your score is to pay off all your debt, or as much of it as you can afford.

Length of credit history: This factor, which accounts for 15%, looks at how long you’ve held your credit accounts. If you are constantly cancelling old cards and signing up for new ones, you’ll be ranking low for this factor. Hold on to your credit accounts, even if you aren’t using that specific credit card anymore.

New credit: Any new credit that you obtain can either hurt or help your score. If you sign up for one new credit card, the added credit limit to your overall credit limit helps your CUR and raises your score. If you apply for five new credit cards, even if you are rejected by four of those, it shows the lenders that you are not being careful with your credit, which can drag down your score. Try not to open too many lines of credit at one time. This factor also accounts for 10% of your score.

Credit mix: Diversify. If you only have credit cards in your credit profile, that can weigh down your score. Same if you only have loans. A good mix of credit cards, mortgages and loans show that you know how to use multiple forms of credit, which can raise your score. This factor also accounts for 10% of your credit score.

Having a high credit score can open many doors for you. Most people just think it makes it easier to get approved for credit cards — which it does — but there are many other perks to being in the excellent score club.

Instant approval: With excellent credit, you have a much better chance of being instantly approved for mortgages, credit cards, rentals, loans and insurance.

Lower interest rates: Higher credit scores come with lower interest rates. This is true for credit cards, mortgages and any other type of loan you may get. You can also refinance your current lows to get a lower rate. With lower interest rates, you can save even more money, putting you in great financial shape.

Higher credit limits: If you want the ability to book your entire vacation on your travel reward credit card, higher credit can help you do that. Credit limits are determined by your credit score, so the higher your score, the better chance that you can get a high credit limit on your credit cards.

Credit card rewards: The best credit card rewards are reserved for those with excellent credit. You get upgraded to rewards like up to 5% cash back, access to exclusive airport lounges, free hotel breakfast, more airline miles, free memberships and credits on things like Uber, Lyft, checked bags and more.

Lower insurance costs: If you have been able to raise your credit score to the excellent level, reach out to your insurance companies and have them rework your plans. Higher scores can often get you lower insurance rates, from car to homeowners insurance.

About the Author

Jeff Hindenach

Jeff Hindenach is the co-founder of Simple. Thrifty. Living. He has a long history of financial journalism, with a background in newspapers such as the San Jose Mercury News and San Francisco Examiner, as well as being published in The Huffington Post, New York Times, Business Insider, CNBC, Newsday and The Street. He believes in giving readers the tools they need to get out of debt.

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