Achieving a Credit Score of 800+ is Possible, Analyst Says - Here's How to Get There

Generally, the higher your credit score, the more likely you are to get a loan.

FICO scores are the most popular scoring model and range from 300 to 850. A score of 670 or above is considered good, while a score of 740 or above is considered very good. Anything above 800 is considered exceptional.

According to Matt Schulz, LendingTree's chief credit analyst, once you reach an 800 credit score, you're highly likely to be approved for a loan and can qualify for the lowest interest rate.

According to Personal Finance, the best way to pay down high-interest debt is to focus on the debt with the highest interest rate first. 63% of Americans are living paycheck to paycheck, which can make it difficult to make headway on debt repayment. Additionally, risky behaviors like maxing out credit cards can cause credit scores to level off.

There's no doubt that consumers are currently turning to credit cards as they have a harder time keeping up with their expenses. There are a lot of factors at play, including inflation. But exceptional credit is largely based on how well you manage debt and for how long.

He said that earning an 800-plus credit score isn't easy, but "it's definitely attainable."

According to a recent report from FICO, the national average credit score is at an all-time high of 716. This is good news for consumers and lenders alike, as it indicates that people are generally managing their credit responsibly.

An "exceptional" credit score can save you thousands of dollars in interest charges.

For example, borrowers with a credit score between 800 and 850 could lock in a 30-year fixed mortgage rate of 6.13%. However, for those with a credit score between 700 and 750, the rate jumps to 6.36%. On a $350,000 loan, this difference adds up to an extra $19,000, according to data from LendingTree.

There are four main factors that affect your credit score. You can improve your score by paying your bills on time, keeping your credit card balances low, and having a mix of different types of credit.

The best way to improve your credit score is to make sure you pay your bills on time every month. This is especially important if you only make the minimum payment due. According to LendingTree’s analysis of 100,000 credit reports, 100% of borrowers with a credit score of 800 or higher paid their bills on time, every time.

Prompt payments are a key factor in maintaining a good credit score. Roughly 35% of a credit score is determined by how well you manage your payments.

To avoid being late, Schulz advised setting up autopay or reminders.

While having a high credit score doesn't mean you'll have zero debt, it does show that you have a history of managing your loans responsibly. In fact, according to LendingTree, consumers with the highest credit scores owe an average of $150,270 in mortgage and other debts.

Your credit utilization rate, which is the amount of credit and loans you're using compared to your total credit limit, is the second most important factor in a great credit score. It accounts for about 30% of your score.

As a general rule, it’s important to keep your revolving debt below 30% of your available credit to limit the effect that high balances can have on your credit score. However, according to LendingTree, the average utilization ratio for those with credit scores of 800 or higher is just 6.1%.

"You can improve your credit score by reducing your debt, but you can also change the other side of the equation by asking for a higher credit limit," Schulz said.

A longer credit history can help improve your score by giving lenders a better idea of your repayment history. This can help them feel more confident about lending to you in the future.

The length of your credit history is an important factor in your credit score, accounting for about 15%.

It's beneficial to keep your accounts open and in good standing, as well as limiting new credit card inquiries. According to Schulz, "lenders want to see that you've been responsible for a long time. I always compare it to a kid borrowing the keys to the car." By taking these measures, you're more likely to be seen as a responsible borrower.

Having a diversified mix of accounts is one way to help improve your credit score. This is because each type of account makes up about 10% of your total score. Another way to help improve your score is to limit the number of new accounts you open.

According to Schulz, having a mix of different types of credit is ideal. This can include installment loans such as auto loans and student loans, as well as revolving credit like credit cards. Having a variety of credit types can help improve your credit score.

It is important to know that you should not take out a new loan just to help your credit mix. Debt is a serious thing and should only be taken on as needed.