Comprehensive Guide to an 800+ Credit Score
Getting an 800 + credit score won't happen overnight, but the benefits of having excellent credit are well worth it. Even if you've got bad or no credit history, it can be done, and with this guide we're going to get you one step closer to that goal!
An "Excellent" Credit Score Can Lead to Excellent Living
Your credit score is an important part of your identity, and when it comes to your financial goals and ambitions, that number can carry a lot of weight.
A high credit score can help you achieve your dreams, while a poor one might hinder you from reaching your goals.
Unfortunately, plenty of people have a ideal score, and this is keeping them from getting the mortgage they need or the loan they want.
An "Excellent" credit score can help you secure a low-interest loan, get lower premiums on insurance, and score better credit cards.
That loan might be the key to opening or growing your business, which can lead to further financial success!
A low score will keep the best offerings by lenders out of arm's reach, which can mean losing out on loans with low interest and credit cards with higher limits and better rewards—like a killer sign-up bonus.
With many Americans living with "Fair" to "Subprime" credit, obtaining excellent credit seems like a pipe dream to the average person, or like a privilege reserved for the fortunate few.
Unfortunately, even that number is getting smaller.
In fact, the number of people with super-prime credit has decreased considerably over the course of the economic recession.
The road to excellent credit may take more than just a few days to traverse, but with patience and diligence, anyone can start walking down that path.
Improving your score could easily be the first step you take to greater control over your finances and achieving your dreams!
It took me actually sitting down and looking over every single statement, every bill, and every interest rate to see where I needed to pay things off immediately, versus chipping away.
But once I got the bigger balances out of the way, the rest were a lot easier to handle.
Within a year, I had all my accounts paid off, and my score improved dramatically.
Getting your credit score where you want it to be is possible, and there are strategies you can learn and tricks you can use to achieve it.
So long as you educate yourself and keep your goals in mind, it can be done.
Even if you've got a low score now, that can change.
A score is a part of your financial identity, but just like people, scores can change!
In fact, with diligence you could get it up 100 points in just a month's time.
Your coming here is the first step towards better credit, better finances, and a better life overall.
By the time you're done reading this comprehensive guide about how we got to an 800+ credit score, not only will you have a better understanding of how credit scores work, you'll know what options are available to get your score higher!
Why Is an 800+ Credit Score Useful and Why Do You Need One?
Credit scores are a crucial part of your financial identity that allow lenders to know that when you borrow money you can be trusted to pay it back – interest and all.
Trustworthiness can be a tricky thing to measure, but that's exactly what a credit score attempts to do: measure your financial trustworthiness.
That means the higher the number, the more trustworthy you'll appear to lenders.
When you want to borrow money, your credit score is checked
Lenders want to know you're good for the money they lend you.
Think about it – you wouldn't lend your bike to a friend if you knew they weren't going to give it back.
So it makes sense a bank or credit company wouldn't want to hand out a loan or card to someone they couldn't trust to pay it back.
Because of this, it's good to know just when the lender is going to check and when it won't.
If you're new to credit, it's important to see just how important that three-digit number is, and if you're not, a little review can't hurt either!
Credit card companies check your score when issuing a card. A credit card is a plastic slate that allows you to borrow for a short bit, and then, after a billing cycle, pay back the company or bank that lent you the money.
Credit cards are pretty common nowadays, with most Americans keeping them snugly tucked away in their wallets.
Just like the millions of Americans that use them, not every card is the same; you might be surprised at just how many ways of borrowing money there are!
And likewise, not all cards are the same.
Some cards feature higher limits, plenty of rewards, and other features. Finding and using the credit card that's right for you can be an important step to building good credit.
Naturally, if you're hoping for a card that allows you to spend more, you're going to need to prove to lenders you have a healthy credit history, and a high credit score.
You might not feel too bad lending $5 to your less trustworthy friends, but $500?
Lenders will check your credit score before giving you a loan. Just like credit cards, a loan involves borrowing money, and lenders won't give you money if they don't think they can get it back.
Also like credit cards, more money borrowed in a loan is going to require a larger credit score beforehand.
The logic is the same: Bigger loans are reserved to those who can prove they are worth the trust.
Statistically speaking, someone with an 800 credit score is much less likely to be irresponsible with borrowed money than someone with a 500 credit score.
They've shown in the past they can be trusted and can expect lenders to notice that.
Borrowers should expect a decrease in their ability to be approved for a loan if their credit score is below 740.
Insurance premiums are decided based on credit history. While this doesn't apply to all insurance, non-medical premiums tend to be related to your credit score, which means the higher that score the cheaper the premium.
Your credit score can make a difference when it comes to the cost of your insurance premium.
Those with "Good" credit and those with "Excellent" credit pay an average difference of $214 in yearly premiums.
When you go to apply for home or auto insurance, your provider will make a check of your credit score before deciding your premium.
Unlike with loans or certain credit cards, this won't keep you from getting the insurance you want, but it won't be as cheap as it could be.
While the reasoning behind this isn't particularly clear, the idea is that lower credit scores tend to be related to high accidents when driving or owning a home.
Whether you find it fair or not, it is a reality that you'll want to be prepared for when applying for insurance.
Your credit report might be checked when applying for a job. For example, employers may check your credit when hiring an employee that will use a company credit card.
If you're reading this with a job interview tomorrow and a bad credit score sitting behind you, don't worry.
Your prospective future employer can't actually see that number, and even if they could, they're not usually checking to make sure you have a good history.
What's occurring here is employers are usually trying to cover their tracks.
If you're embezzling money, for example, that might appear in the report they see.
If they have that information beforehand, they can make decisions about you as a legal liability.
Hopefully, that's not bad news for anyone reading this, but what's really important is that even here, your credit history plays a role when job hunting.
While it's a limited one, it shows how often one can expect their credit score to play a role in their day-to-day life!
Potential landlords won't like bad credit. While it's possible to rent an apartment without a credit score handy, some landlords may not feel comfortable moving forward without a check.
Renting an apartment, for example, is based on the understanding that you're capable of making payments of a certain amount at a certain time – your credit score is one of the best indicators that you can do this.
Without it, even if you have a decent substitute as evidence, most landlords are not going to want to take the risk if they have other potential tenants available.
Bad credit could keep you from getting a cell phone plan. While phone plans are also available to those with little or no credit, the best and most cost-effective ones are reserved for those with excellent scores.
A cell phone service plan is a financial obligation, and to ensure you will meet that obligation come billing time, carriers are going to want to see your credit score before anything else.
With good credit, not only will you get better deals on plans, you will also be asked to make a much smaller down payment!
If you've seen ads from a cell service provider offering great deals that you might not have noticed when you signed up, check more closely and you'll probably notice its marked as "only available for qualified customers."
Qualified customers often have a score of 750 or more.
Not every financial situation involves a credit pull. Loans and insurance, like student loans and health insurance, are completely unaffected by credit score, unless your student loans are coming from a non-government lender.
Private student loans may be given to those with bad credit, but the interest rate of that loan will be related to the borrower's credit score.
They are still strong options that require the maturity of non-government subsidized loans and are provided by banks and credit unions like Student Choice.
Also, since a good score indicates financial responsibility and opens up more economic opportunities, it may play a crucial role in paying off student loans earlier and in the future.
The takeaway here is to never take that three-digit number lightly!
There are big economic benefits to a high credit score that can save you thousands of dollars
If your credit score is checked frequently, then we can all agree that a high credit score must make a pretty big difference in quite a few places, right?
In fact, it can save you a lot of money.
A good credit score can save you money when it comes to financing a house, a car, and other big-ticket items.
It's important to know just what benefits a higher score is getting you, after all, the score is just a number.
It's what it gets you that counts.
A good score can get you a lower APR. For those of you new to credit, APR (Annual Percentage Rate) is how much interest you're paying on a credit card balance per year.
For those who always pay off their balance on time, this is nothing to worry about, but not all of us do.
When you're shopping around for a credit card, you'll often see the APR listed at something like 14.99-24.99%.
That doesn't mean that number fluctuates randomly, it's based on your credit score!
Naturally then, a higher credit score means a lower APR, and the lower the APR, the less the interest will be on any outstanding balance.
Admittedly, this is one of the less important benefits, since those with good credit rarely have to worry about their APR, and keeping that credit score high means paying those bills on-time and in full.
But, a high APR is a high APR, and I can't think of anyone who'd prefer it over low interest.
Just to give you an example, about ten years ago, I was stuck with a "Fair" credit score of around 620, which landed me with a low-limit credit card featuring a 24% APR.
For almost six months, I was paying down an outstanding balance of $500.
Making payments of around $48 a month, the interest left me with an extra $68 owed in interest.
While that number might seem small, it's more than 1/10th of the original credit limit!
As I said before, a high APR is a high APR; it pays to have a high credit score instead.
I paid the card off once I had a chance to really think about how much the interest was costing.
Getting approved for a loan is easy with a high credit score. Like we said earlier, for almost any loan application, your credit score is getting checked.
When a lender decides you're trustworthy, you get the loan.
That means a good score can lead to loan approval, and the better the score, the larger the loan can be.
For those wanting to start up a business, or even invest in one, your credit score could carry you that much closer to accomplishing your financial dreams and career goals!
The higher the credit score, the lower the insurance premium. Excluding medical insurance, any insurance on consumer goods, from a car to a house, is going to be affected by your credit score.
Working in insurance is all about analyzing data in the hopes of predicting whether or not a customer is accident-prone.
One way these companies do that is by checking a customer's credit score.
The logic is that a lower score points to a higher probability of accidents occurring.
If your insurer thinks you're a higher risk than the average customer, the insurance you buy is going to cost more.
The ideal situation for an insurer is that you don't need to collect on your insurance, but if there's a higher chance of that situation happening, you're expected to pay for it.
Since insurance is sometimes a necessity (for example auto-insurance for those who drive), keeping that premium low is a huge economic benefit.
The way to keep that number low is by keeping your credit score high!
A solid credit score will keep interest on loans and mortgages lower. Just like how your score affects your credit card's APR, and whether or not you get approved for one in the first place, it also affects your loans and mortgages and the interest you'll pay on them.
For those hoping to buy a house or possibly start a new restaurant or mom n' pop shop, a mortgage or loan is going to play a very important role in making those dreams a reality.
Being unable to get approved might keep you living in apartments until you learn how to make your credit score grow.
With good credit, not only will you get approved more often, but you can expect to pay less on those loans over time.
And sometimes, just a small difference in credit scores can cause a massive difference in savings.
Over the life of a 60-month auto loan, the difference between a 610 and 630 credit score could be savings of just under $4,500.
When I went to purchase my first house, I ultimately had to take out a mortgage of 200,000.
Luckily at that time, my credit was good enough to get approved for a relatively small down payment, but low enough that the APR was 5%.
Down payment considered, I was paying a little under a grand a month with a loan term of 30 years, which meant 360 payments.
Due to the relatively high-interest rate, I would be paying about $167,860 in interest in the end if I didn't sell the house.
With "Excellent" credit, I might have been able to nab a 3% interest rate, which would result in interest costing me roughly $93,199.
That's close to a difference of right under $75,000—and that's just on the surface.
If we're being as brutal as possible with the numbers, the money paid on interest, which could have been twice as low, could have been invested.
Cash lost is cash that could have been spent elsewhere, and it's all because at that time, I had a low credit score.
With a better score, I could have scored a better mortgage.
For those with bad credit currently, there is a bit of a catch-22 at play when it comes to loans.
Due to your credit score, it is harder to get approved for credit and loans, but it is those loans that will allow you to prove you can be trusted with lent money in the future.
Luckily, here at CreditLoan, we have your back, even if you've had trouble with credit in the past!
With our services, you could be approved for a loan of up to $5,000.
Paid back responsibly, not only could that help you with your current goals, but also establish yourself as a responsible borrower for the future!
Credit card limits go up with your credit score. As we've said before, when a company or bank extends a line of credit or lends you a loan, they want to be sure you're going to pay it back at some point.
If you have a lower credit score or a limited history of credit, you can expect a lower credit limit.
Likewise, the higher your credit score, the better the credit card.
Some credit cards can provide a $10,000 limit, but those sorts of privileges are reserved for borrowers who have shown they can use it responsibly.
Having good credit can boost your financial confidence. Just under half of Americans are currently living with a quarter of $100,000 worth of debt.
Financial woes like debt can destroy a person's sense of confidence, leave them feeling like they have no control over their finances, and can even bring about depression.
Debt can cause nervous breakdowns, weight gain and loss, conflicts at home, and other issues.
A high credit score can turn all of that around.
It's simply reassuring to feel you have control over your economic future while you stare at a credit score that tells you you've been wise about your spending.
Not only can it be a confidence booster, the skills you learn and the habits you develop to get your score in the "Excellent" range will leave you a lot better off when it comes to managing and spending your money.
A credit score can and will change, but you'll never lose what you've learned.
A good credit score isn't going to get you less interest on student loans or premiums on medical insurance. It's important to know exactly what excellent credit will get you.
Having a high score isn't going to turn you into a millionaire overnight, and it isn't going to get your start-up off the ground instantly.
But it is the first step on the road towards fulfilling those ambitions, as it will be very hard to achieve them when you can't get a loan to start with.
Understanding the Credit Landscape Will Help You Realize What You Need to do to Boost Your Score
Credit scores can seem kinda simple on the surface, a number that shows how trustworthy you are and what lenders can expect from you.
The higher the number, the more trustworthy!
But what defines a good credit score versus a bad one, who decides that number, and what goes into a score?
These sorts of questions dig a bit deeper into the matter, but just because it seems complex doesn't mean understanding it has to be.
I firmly believe understanding how credit scores work is a necessary part of having a higher score, and the point of this guide is to make that possible!
There are five different ratings for credit scores, ranging from "Very Poor" to "Excellent"
There are actually different types of credit scores that are used in different kinds of situations.
One of the most common pulled by lenders is your FICO score (more information below), which in its standard form ranges from 300-850, with 300 being the lowest.
There are five different ratings between 300-850, and knowing them will help you interpret your credit score and what you can expect.
"Very Poor" describes a score of 300-579. This is the lowest credit score an individual can have, often the result of irresponsible borrowing practices or sometimes a very limited history of credit usage.
The good news the least amount of people have this score, but even if you are one of the few with "Very Poor" credit, there is hope!
If you're here, reading this guide, you're already taking the proper first steps to getting a better rating.
Unfortunately, those with bad credit should expect trouble when applying for a loan or credit, especially for the larger loans and higher credit limits, which will be virtually out of reach.
Some credit cards may require a fee or deposit before approval.
"Fair" describes a score of 580-669. This is the second most common credit rating a person can have.
Those with a "Fair" rating are still considered less than ideal borrowers, especially those with a score lower than 600.
While they may be able to take out smaller limit credit cards or smaller personal loans, large amounts of money like a mortgage will still take some improvement to the score before being available.
"Good" describes a score of 670-739. This is, fortunately, the most common rating for American borrowers, describing a little under a quarter of those with credit.
Those with "Good" credit are less likely to become delinquent, meaning banks, lenders, and credit companies can count on them to pay back the money borrowed.
Large loans may still be somewhat out of reach, as well as high credit limits or cards with significant perks, but borrowers with a "Good" rating can expect decent treatment from lenders.
APRs may remain somewhat high, however, and insurance premiums won't be their lowest.
"Very Good" describes a score of 740-799. While more people tend to have a "Very Good" rating than those who have a "Very Poor" rating, it is still somewhat uncommon.
Applicants with a "Very Good" rating can expect better-than-decent treatment from lenders, and in fact, a credit score of 760 is usually all that is needed to receive the best treatment from lenders.
Once you start aiming for a higher score, it becomes more of a personal challenge than anything.
Most applicants with a "Very Good" credit rating can expect lenders to give them the best treatment, including low APRs, low interest, lower premiums, and higher credit limits.
This is primarily because lenders can almost be certain the applicant won't end up delinquent.
"Excellent" describes a score of 800-850. This is the best possible credit score someone can achieve, and at this point, your focus has shifted from improving your score to maintaining it.
However, once you hit the mark of exceptional credit, it can be hard to keep it there.
Small marks can have a bigger effect than they seemed to have in the lower ratings, and there's no reason to drop the good practices that got you your good score once you're there.
Admittedly, an ideal credit score of 850 is kind of hard to hit because credit scores are constantly changing.
Likewise, since there are multiple scores produced by multiple credit bureaus, it's reasonable to expect an 850 on one report may be an 848 on another.
Getting to a rating of "Excellent" may take a while, but not only can it offer you a range of benefits from lenders, it can also give you a boost in confidence when it comes to your finances, which might be the best reward of all!
Subprime credit tends to be below 600, super-prime tends to be above 720. These are common terms used in describing credit ratings, with subprime mortgages being a common topic during the 2008 economic crisis.
Those with subprime credit are much less likely to receive standard treatment from lenders, and will fall short in their goals to take out a loan or open a line of credit.
Super-prime on the other hand is the opposite, and those with super-prime credit can expect some of the best treatment from lenders.
It's important to know these terms when evaluating your own credit score, as they may come up when you're applying for a loan or credit.
Keep in mind, ratings are subject to the lender's evaluation, and in certain situations, a 720 may give you the same treatment 760 will get you.
It doesn't just depend on your credit score, but on the bank or credit company's interpretation of that number as well.
That's why it's always important to get that number as high as possible, and once it's there, try and keep it there.
While different lenders might view a 720 score differently, no lender will think an applicant with an 820 score deserves anything other than the best treatment.
There are two main types of credit scores, FICO and Vantagescore
There are three main credit bureaus that use two different algorithms to figure out two separate credit scores.
Those two different algorithms tend to get tweaked depending on who's inquiring, however, leading to larger ranges (some 250-950) and different scoring methods.
While your FICO credit score is the most commonly used in lending decisions, your VantageScore credit score is also important to know and monitor, if possible.
While it's likely the two algorithms won't produce the same number, the same credit history and its health, will be reflected in either one, making them both useful.
There are three credit unions that decide your credit score. These three credit unions are constantly compiling data related to how you borrow and pay back money owed.
They then use this information to create FICO scores and Vantage scores.
While we won't go into too much detail here, it doesn't hurt to be familiar with the bureaus and how they work, especially considering that the road to good credit starts and ends with making an inquiry through them.
FICO is the most popular algorithm, looking mostly at payment history and debt. FICO, which stands for Fair, Isaac, and Company, is a data analytics company that debuted their world-famous FICO score in 1989.
It has been used by the Big Three bureaus in producing your credit score ever since.
Since your FICO score is pulled in 90% of lending applications, it's important to be most familiar with this score – it carries a lot of weight!
FICO's algorithm takes five different factors into consideration when calculating your credit score.
The first and most important is payment history, which accounts for 35% of the score.
Payment history includes credit card payments and loan repayments.
This means the better you are about paying your monthly bills, the higher that score's going to be.
This is why credit cards can provide a quick means to raise your score.
Just paying them off responsibly makes up a huge percentage of it.
The second most important is your credit utilization ratio (or debt-to-income ratio), which is 30% of your FICO credit score.
Credit utilization is how much of your line of credit you've used.
You can figure out your credit utilization by dividing a card's balance by its limit.
For example, if you have $1,000 line of credit, and you use $100, you have only used 10% of your credit, which looks great on your FICO score!
However, if you use $500 that month, well, that's half your line of credit! You should expect your score to take a hit.
15% of your FICO score is credit history length.
This is why so many people will advise you not to close down credit cards, even if they're collecting dust.
The longer you've had a card, the higher your score will be.
Canceling that card can put that long credit history in jeopardy, and you have to be careful about how to manage your credit age.
Of course, having a card with plenty of debt on it for 10 years isn't going to make that debt look any better on your credit report.
If you eventually do manage to get it paid off in full, those 10 years can start to work favorably toward 15% of your FICO score.
Unfortunately, this means it's not really possible for those new to credit to have an 800+ FICO score immediately.
But that's okay, as building credit takes time.
Nine years is usually considered an excellently aged account.
10% of your FICO score is new credit, which is whatever credit you had taken on recently, like cards and loans.
This is why you've probably heard someone say it's best not to open up too many cards at once.
The new credit portion of your FICO score accounts for all the lines of credit and inquiries into your credit report that were made within the last 6-12 months.
That means the if you go opening five credit cards from January to June, your FICO score is going to reflect that in a negative way.
When you think about it, it makes sense – opening up a bunch of lines of credit does suggest a lot of borrowing will occur, otherwise, why get the credit?
And that much borrowing should rightly put lenders on their toes.
Luckily, new credit only affects a credit score for up to 12 months, but it might linger and appear on your report for 24.
Finally, the last factor of your FICO score is the credit mix, which makes up 10% of your score.
Credit mix is what it sounds like, a mix of different types of credit.
Lenders want to know you have dealt with different types of credit and know how to handle each of them; this includes loans, bank cards, retail cards, furniture purchases, and even rental history.
If it can be lent and then paid back in some way and is part of your financial history, it will contribute to this part of your FICO score.
Credit mix is the least important part of your FICO score, but if you're a perfectionist, you might want to keep it in mind when going for that super prime score.
VantageScore was formed by the three main bureaus in 2006. Your VantageScore takes into account six different factors, though the first three resemble your FICO score very closely.
The VantageScore has undergone some revisions over the past few years, with VantageScore 3.0, the current revision, debuting in 2013.
The most important element in your VantageScore credit score is once again payment history, which makes up a whopping 40% of your score.
Just like last time, this includes card and loan payments, which serve as solid indicators of good credit habits.
Like with your FICO score, your credit utilization ratio plays a crucial role in your credit score, but at a slightly smaller 20%.
Like before, this category looks at what percentage of your available credit you actually use.
At 21% of the total score, your credit history length is more important in your VantageScore than your FICO score, so it'll be important to have some aged cards before you hit high numbers.
While VantageScore also takes new credit into account, it only affects 5% of your score, and so, it leaves a smaller impact on the overall score.
While that doesn't mean you should start opening accounts with a ton of rewards cards left and right, it is nice to know that doing so won't automatically tank your score.
Balances, which account for 11% of your total score, is the total amount of debt recently reported and currently present on all credit accounts.
This goes hand-in-hand with payments – lenders want to avoid creditors who have a lot of debt. No debt sends the best message possible.
Finally, the least important factor when it comes to calculating the VantageScore is the available credit category, at a very small 3%.
Available credit is the total amount of credit you have available on all accounts usable at that time – the more credit available, the better your score.
While it can take a while to build up a large amount of credit, as you'll need larger credit lines and those take higher credit scores, that credit to it also has to stay available.
This means you should keep your debt-to-income ratio low even if you do have a lot of credit – otherwise, it's not available and is actually working against your score.
Understanding a credit score is the key to getting a higher score
At first, credit scores might appear intimidating, but hopefully, the guide above can clear up any confusion about how scores are calculated and what goes into them.
By understanding what makes up your score, you'll understand what it is you need to focus on to improve it.
And remember, building credit takes good time, literally.
One of the factors that decides that number is the length of your credit history, so those new to credit will have to be patient.
But don't get discouraged, there are plenty of other factors to focus on first.
Also, keep in mind an 850 score is not necessarily a number you will see, even with the best credit practices.
Credit scores are constantly changing, but so long as you are aiming to get that number high and keep it there, you are on your way to a brighter financial future.
Tactics to Reach an 800+ Credit Score
The journey toward "Excellent" credit isn't short enough to be completed overnight, but it isn't an impossible path to follow either.
With the right effort and know-how, one can expect to make amazing progress when it comes to their credit score in just a matter of months!
There are people who have raised their credit scores to amazing heights in as little as half a year.
With the proper tactics, you'll be able to go forth with confidence and lay down the foundation of a brighter financial future with a higher credit score and all the benefits that come with it.
Staying informed and checking your credit often is the key to building a better credit score
The fact that you've read this far suggests you think like we do, and you know that knowledge is going to be your best tool when it comes to building a solid credit score.
And the best way to know more about your credit score is to practice credit monitoring.
You are legally allowed to view your credit report once a year per bureau, for free. The Big Three bureaus all offer separate credit monitoring services, which they usually provide at a cost.
These services will often monitor your report closely for error and fraud.
Luckily, US law states that consumers are legally allowed to pull their report once a year from each bureau.
To make your annual inquiries, go to annualcreditreport.com and request to receive your free credit report by mail.
Once you get it, you want to keep your eyes open for anything out of place as well as see where you can make the biggest improvements.
You should know beforehand that, currently, full credit reports are only sent to consumers by mail.
So it might take a little while before you can get a hold of your score and see what might be affecting it.
It's also important to know that there are different strategies and options when it comes to making your annual pull.
Since you have three bureaus to pull from and each bureau should have relatively similar findings, it might be a good idea to pull one credit report every four months.
This way, over the course of the year, you can make evenly spaced out inquiries that should still give you a full picture of your credit and what's going on with it.
That said, this will make it difficult to compare your reports between bureaus, which makes it harder to cross-reference and spot any errors.
All three big credit bureaus offer paid credit monitoring services. While they aren't the cheapest option, most of them offer a nice group of features that make monitoring your credit as simple as going online.
TransUnion offers a service called TransUnion Credit Monitoring, which allows you to check your credit reports from all bureaus, the ability to lock and unlock Equifax and TransUnion credit files, and $1 million in insurance.
The service costs $19.95 a month.
If you'd like to learn more, you can visit their website.
Experian's services are called CreditWorks Premium, which offers a plethora of services, including credit reports, FICO scores, monitoring of all the three bureaus, monthly updates, and up to $1 million in insurance.
The first month will only run you $4.99, but it's $24.99 a month after that.
If you're interested, you can find out more info on their site.
Equifax's service, TrustedID Premier, offers three-bureau credit monitoring, your Equifax credit report, the ability to lock and unlock your credit file, and $1 million in insurance.
The special thing about Equifax's service is that due to the recent breach, it was offered for free for a year, provided you signed up before the end of January, 2018.
But even with the cost of $0 a month, the service still feels very basic.
Still, if you'd like to know more, visit their site—making sure to read the latest news.
Registering for a monitoring service can be simple. Often these services only require you to go to their websites (links provided above) and click to get started with registration.
All services will require personal information, including your SSN, in order to register you as a client, but so long as you're on the right website, you have nothing to worry about.
Most services also have a companion app you can add to your smartphone for on-the-go coverage.
In addition to the Big Three, there are also third-party companies that keep track of your credit and allow you to do the same, such as eCredable, which offers its services for a low $19.95 a year!
Most cards and banks are already monitoring your credit and finances. And if your card and bank don't offer the services themselves, they might have a partner who does.
If your bank or credit card already has your back, why pay extra?
Cards like American Express, Bank of America, and Barclaycard US all offer a free look at your FICO score, while cards like Citi and Discover offer a look at your credit score even if you're not a cardholder.
Discover even offers non-customers the opportunity to see your FICO score. This wonderful service will allow you to take a peek at the number most lenders will see when they make an inquiry.
If there weren't already enough reasons to like Discover, here's another one.
Sometimes when your score is pulled for a loan or card, you can ask for a peek. This method may not always work, and it doesn't really replace a full credit report, but for the extra-cautious, it's worth a shot.
The next time you go to sign a lease or take out a loan, ask your landlord or lender to let you have a peek at your report.
While it's entirely up to the person making the pull, you never know, they might just do it!
Monitoring credit is like getting a diagnosis. If bad credit is a disease, you need to know just what kind of disease you have on your hands before taking any medicine.
Once you make the shift from improving bad credit to maintaining good credit, monitoring will still play a crucial role.
One of the key behaviors for most people with "Excellent" credit is that they keep an eye on their score consistently.
Good practices with your credit means a higher score
While there are a few tricks someone can learn when it comes to obtaining a super-prime rating, the most important part is obvious – if you continue to use your credit responsibly, you can expect a higher score in the future.
A credit score is made up of different categories of data that offer a reflection of different behavior when it comes to how you've used credit in the past.
So, it makes sense that the best practices should fit into the categories we've listed above for FICO and VantageScore.
For example, the single most important part of your FICO score is your payment history.
If that's the case, then you should make sure you're paying off your bills on time and clearing your balance as often as possible!
Making timely payments is fundamental to increasing your credit score. It makes sense, the single most important thing that will show lenders you can pay them back when they expect it, is that you have a history of doing so before.
This means whenever your bills come in the mail, you make sure to pay off your balance as soon as possible rather than letting them carry over into the next billing cycle.
The same goes for any outstanding loans you currently might have on your back.
Make sure you pay them on or before their due dates, instead of after.
Not only will failing to do so show up negatively on your credit score, if a card comes with late fees, you may end up paying more money down the road.
Keep credit utilization low. Credit utilization is how much of your credit limit you use.
The easiest way to figure this out is by dividing your balance by your credit limit.
So, if you have a credit card with a limit of $1,000, and you utilize $500 by going on a shopping spree, you have utilized half your credit.
And while half might not feel like much, the smaller that percentage, the better your credit score.
This means avoid maxing out cards whenever possible.
In fact, while opinions vary, most people advised spending no more than 20-30% of your credit limit.
By doing this, you'll hopefully be able to land a stronger credit score in the future.
If you are using most of your credit, that frightens lenders.
The logic here makes sense: a lender is going to feel safer lending money to a borrower they can trust not to use it hastily.
Budgeting can help you get your finances in order and your score higher. It probably goes without saying, but proper budgeting is the backbone of solid financial independence and control.
Your credit score is based on your behavior as someone who borrows cash.
Budgeting is all about knowing how much money you have and how much you can spend.
If you can master budgeting, you could become just as skilled at borrowing.
This skill will serve you well beyond improving your credit score—knowing how to budget will immediately help keep your credit utilization low and keep your payments on time.
Older credit gives you a higher score. If you're new to credit, there isn't much you can do here; patience is the key.
That said, if your credit history is short or even nonexistent, now is the perfect time to take out a line of credit!
If you already have a few accounts that are old, be careful about opening up a new card.
By opening a new line of credit, you make your overall credit history younger; the more new cards, the younger your credit history.
Keeping a variety of credit types will help you improve your credit score. There's plenty of ways to borrow money.
If you've only ever swiped plastic, I may doubt your ability to handle larger loans, a mortgage, or other forms of credit.
By maintaining a healthy mix, you can ensure your credit score reflects the behavior of someone that knows how to deal with anything.
But this doesn't mean you need to take out an auto loan—even if you don't want a car—just to improve your credit mix.
In addition to applying for a credit card, you can also improve your credit by taking out a personal loan, or even a credit builder loan.
Credit-building loans are a lesser known way to build credit.
These are typically smaller loans offered by banks and credit unions that exist simply to be paid off, which will, in turn, add positive marks to your credit report.
Like all loans, credit builder loans will have interest rates that should be considered, and if they don't report to all three bureaus, they aren't worth your time.
However, these can offer a nice, easy alternative or addition to building history through a card.
Taking out a personal loan can offer a similar opportunity when it comes to building a varied history of credit use, and luckily at CreditLoan, we offer the opportunity for even those with bad credit to take out personal loans.
Personal loans are smaller loans which can be taken out for any number of reasons, allowing the person borrowing to make a purchase.
Still, it's always wise to be careful when taking out personal loans because they typically come with somewhat higher APRs, so strive to make payments when they're due.
Fear of your credit score will never help make it better. Your credit score isn't a monster under the bed, it doesn't go away if you don't look at it.
Just like everything in life, you should never let fear hold you back from a brighter future.
Often, fear of the unknown is just our imagination, and if we've never seen our scores, we're probably imagining they're worse than they are.
Unfortunately, just because you're ignoring your score doesn't mean it's going away – bad credit stays how it is until you act.
Building your score takes effort, especially if it's from the ground up. That effort requires being informed.
Don't be afraid of credit cards, they can help. With general mistrust of big finance since the Great Recession, as well as a prevailing view of credit cards as a quick way to rack up debt, millennials tend not to carry plastic.
It's always good to be careful, but fearing plastic might not get you as far as you'd hope.
Credit scores are an important part of your financial livelihood, and credit cards (and their proper use) are a quick way to have a large and positive impact on that score.
Don't let fear stand in the way of that.
Credit isn't about endless shopping and purchasing what you can't afford, it's about proving your ability to be responsible when it comes to your money, and credit cards offer a very good opportunity to do just that!
Land a Low-Interest Mortgage or Top-Notch Rewards Card
Once you finally have your score looking how you want it to, it's time to take advantage of your hard work!
And if you're not there yet, these are all the things you have to look forward to.
A higher credit score will allow you the opportunity to improve your current loans and credit
The thing about credit is, the better you are at using it, the more opportunities you have to use it well.
This can include healthier loans, credit cards with higher limits, and insurance with lower premiums, all because you can prove you're responsible.
A higher credit score will give you a chance to refinance your mortgage. When you originally took out your mortgage, it's possible you had a less than prime credit score, leading to a high APR and ultimately a greater amount of interest over time.
Assuming you're not going to sell the house, refinancing your mortgage is a great option to take that APR and get a better rate.
If you're APR was 5% before, you might be able to get it down a percentage or two, which can save thousands of dollars.
As I mentioned above, had my APR been 2% lower, I could have saved $75,000 on the life of a $200,000 mortgage.
That's almost half the mortgage!
If you aren't looking to sell the house, refinancing can be a brilliant way to put your credit score to work!
"Excellent" credit can net you excellent credit cards. This one requires a bit more finesse since opening and closing credit cards will directly affect your credit score.
Also, new credit cards introduce new possibilities to take on debt and always need to be used carefully.
As I said before, you shouldn't fear credit cards, they offer you a chance to further yourself financially.
But if your card has a lower limit than you'd like, now might be the time to upgrade.
New cards can offer lower APRs, fewer fees, and more perks like points and sign-up bonuses.
These can result in further savings on things like groceries and gas.
Higher credit limits can help you manage your finances a little easier as well!
Not too long ago I signed up for a card with 6% cashback on groceries.
We currently spend about $500 on groceries a month, so my rewards should be over $360 a year.
Even if the card had a high annual fee of $100, I'd still be making $260 just for buying groceries.
Before you take on a new card, or upgrade your existing one, make sure you read any fine print before doing so.
While APR may not be something you worry about, a new card can also come with annual fees you may not have noticed.
Also, while some banks and creditors offer opportunities to upgrade existing cards, always check beforehand to make sure a new account is not being opened.
Even if an upgraded card has a new number, that doesn't mean a new account was opened.
But if one is, it can affect your credit score, which may be a hit you aren't prepared to take.
Still, excellent credit will at least give you the option for better cards.
A higher credit score will get you a lower premium. You're already paying a monthly fee for the insurance you have as it is.
If that number could be lower, why wouldn't you want it to be?
If you own a house or a car, or anything that's insured for that matter, once your credit score is high enough, you should contact your insurer and ask for a new rate – you've earned it!
You're no longer the risk they thought you were, so why stick with the old rate?
Getting your credit score up gives you a chance to work on financial goals
"Excellent" credit shouldn't just be your end goal; it's a means to a much larger end.
With your newfound credit status, you can finally set in stone the goals you had been dreaming about in the first place.
It's rare that someone makes the journey to better credit for the high number alone.
Now is your chance to land a mortgage. Buying a house used to be a large ambition for many Americans, and it seems to fade more every day.
In fact, the number of non-homeowners is about half for people aged 18-34.
Luckily, with "Excellent" credit, you are much more likely to be approved for a mortgage.
When the bank or lender goes to check your credit score, those high numbers should land you just the house you were looking at!
The same goes for those hoping to start a small business.
This is especially important because getting loans approved for a business might offer you a chance to really take a hold of your finances and bloom economically.
Anyone interested in opening a small business or two is probably familiar with the fact that businesses need loans to get off the ground and often those loans need credit.
Good credit can help in the process of paying off debt. It can be difficult to both have extensive debt and good credit at the same time, but if you are one of the few, this might be your chance to hit your payments hard.
Not only is a high credit score indicative of solid behavior when it comes to borrowing, it can offer you breathing room in terms of loans and credit, as well as a confidence boost when debt is keeping you down.
Debt is depressing.
That's no secret to anyone that's been in the hole.
Having good credit can give you just the emotional pep you need when facing financial difficulty.
Likewise, having strong credit can help you meet financial goals which are helping you invest more and save more, like refinancing a mortgage or getting a new rate for your insurance.
Any money you get to save can start to go towards paying off debts.
Also, when doing this, it's always wise to pay off the debt with the highest interest first.
Afterwards, make your way down the list until you arrive at the debt which is costing you the least, and then, hopefully, none at all!
Achieving excellent credit might be just the time to treat yourself
There's no mystery or trick to this one; you've made it to great credit, now take a great vacation (if you have time).
Managing your money is difficult, but money is ultimately a tool to help you along in the pursuit of happiness, or at the very least, enjoying life more.
With great credit, you may have ended up with a new rewards card in your wallet, and some cards offer sky miles to help you get off the ground and get to where you're going.
But even if you aren't trying to get on a plane anytime soon, it doesn't hurt to put your hard-earned savings to use with a little R&R—you deserve it!
And if you're not there yet, let lounging by the poolside without too many financial worries be your inspirational image to work harder!
Cross That Final Hurdle Between "Very Good" and "Excellent" Credit
We've gone over a few things you can do to improve your score, and a few of the benefits you can expect once you have.
That said, there are a few tips and tricks for those who have already walked along the beaten path for a bit, and hopefully, they can offer a little extra insight.
Dispute claims you don't recognize on your credit report. Assuming you're checking your credit report frequently enough, you'll eventually begin to notice some things that seem out of place—a record that seemed to appear out of nowhere, perhaps.
This is actually quite common, and there are also many different types of errors and typos you should look for, including expired but lingering items and accounts that don't belong to you.
Don't worry, you can dispute these claims and others, cleaning up your credit report and ensuring that number gets and stays closer to where you want it to be.
To dispute a claim, all you have to do is contact the proper department at any of the three credit bureaus.
You'll contact them by letter, and it's smart to find a simple template for this letter online—that way all the important jargon is in place.
Also, make sure you send it to each bureau, as the error may be dragging your report down at all three bureaus.
If the error is genuinely a mistake, it will be removed upon inspection.
If it was not an error in the first place, you may get lucky and be able to dispute it anyway.
If a dispute goes unanswered, you may file for it once again.
After that, it is removed from the record unless someone verifies it.
Disputing claims is a crucial part of credit hygiene and is something that can make the difference between "Good" and "Excellent" credit.
Rate shopping can keep you saving money even when your credit score is bad. There is never, ever a good reason to go with a loan or a credit card with higher interest, if everything else is the same.
By comparing the rates of the different loans or cards you're applying for, you may find your first option wasn't your strongest.
And even if it was, it's much better to be safe than sorry.
A minor difference in percentage could cost you much more down the road.
If a personal loan for $1,000 has an APR of 30% to be paid over a year, versus one with an APR of 20%, you'd be paying $150 in interest rather than $100.
While that might not seem like much, the small amount of time spent rate shopping should be worth the $50 pay off.
The same can easily be said of insurance, which features monthly payments of a premium.
If you can pay $100 a month rather than $150, why would you ever choose $150?
It's much better to rate shop and reap the benefits.
Closing cards set back your credit age and score. If you have a credit card that's nine years old (or older), that card is pushing your credit score to much higher numbers.
Therefore, if you get rid of that account, your score will likely take a hit.
It makes sense that older credit results in a high score – if you've shown you can use credit responsibly over many years, people will know your level of responsibility isn't just a fluke.
The moment you close that account, however, it stops figuring into the equation.
That means your more recent cards take over, and their younger ages may start bringing down your credit score.
This is why you should try to keep away from closing a credit account unless you decide it's really necessary.
The same can be said about opening new accounts.
Not only is a hard pull made each time you try to open a credit account, but those new cards reduce the overall age of your credit history.
And the younger the age, the lower your score.
Credit can be a very helpful tool, but it goes without saying (but we'll say it anyway!) that it requires careful use to get you to where you want to be.
Setting up payment reminders will help you keep your payments on track. Most banks and lenders have phone apps and email alerts that not only notify you when a payment is coming up, but allow you to manage your payments directly.
This is a convenient feature that anyone borrowing money ought to take advantage of.
Not only will it keep you on your toes when it comes to improving your payment history, it will also help you see exactly what's going on with the money you are borrowing.
Managing your finances is the key to a brighter financial future. It can't be emphasized enough that taking your finances into your own hands is the most important thing you can do when meeting goals like improving your credit score.
While financial advisers might be worth the money down the road, nothing will help you manage your money better than if you learn just what it is you're doing – and that goes for the money you've borrowed as well.
The moment your personal finances truly become clear, not only will you be able to take control of them, you'll be able to move on and conquer bigger and more ambitious goals.
Hopefully, since you've read most of our guide here, you're already self-motivated to get your money in order.
For those who are just learning to be money-savvy, I can promise you nothing will help you get a better score than managing your finances well.
Of course, if you need help managing your finances and would like some guidance, in addition to the numerous articles we have here, many banks offer financial management services.
One such bank is First Security Bank, which also offers loans and mortgages!
If you've got bad credit, the last thing you should do is give up hope. There are tons of Americans with poor or worse credit; it is, unfortunately, not as rare as it might feel for those who have it.
No doubt we all love hearing success stories of people with incredibly high credit scores who took their economic know-how and went on to invest well or build an empire.
What we rarely hear is the story before that.
No one is born with an 800+ credit score – credit takes time to build.
That kind of story can't be told in a single snapshot.
It may well take an entire movie to do so — a movie that can take up to nine years to film.
The fact that you're here, today, reading this, shows that you are willing to take the first few steps to a higher credit score.
In fact, the only thing you could really do wrong at this point is give up!
Sometimes you'll be surprised just how much you can do as well!
The power is really in your hands, and a 100-point boost could take as little as three months to achieve.
Stick with us and try out some of what we've laid out in this guide.
If you notice a quick change in your credit score, it's possible you've finally found a method that works well for you!
A low score may be keeping you from getting what you want in life, but it doesn't always have to be that way.
Now that you know more about the benefits of having superb credit, you can get started on reaching that "Excellent" score today
An outstanding credit score isn't something you stumble into, it takes time and effort as well as good financial practices to build up a solid credit history and have a score that reflects that.
A solid score can help you secure that card, loan, or mortgage you were hoping to get, as well save you money on interest and insurance premiums!
That's in addition to any money you'd be saving simply by using credit responsibly, the key to achieving a super-prime credit score.
I saw the difference firsthand, of having that solid score.
Recently, I bought a new car.
The experience was night and day from when I tried to buy a car when I was younger, with a less than ideal score.
Instead of haggling over terms and rates, the dealership was offering to throw in a maintenance package, wash and detail perks, and a gas card!
Now is your chance to really take your score, no matter how low it is, and start getting it to that number that lenders will love to see.
Achieving solid finances isn't a sprint, it's a marathon, but there's so much you can do even in just one day!
Do you have a low score?
Have you already started building it back up?
Any tips that have helped you that we missed?
Let us know in the comments below!