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How to get your credit score above 800 and keep it there

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Generally speaking, the higher your credit score, the the better for you when it comes to getting a loan.

FICO scores, the most popular scoring model, range from 300 to 850. A “good” score is usually above 670, a “very good” score is above 740, and anything above 800 is considered “exceptional.”

According to Matt Schultz, chief credit analyst at LendingTree, if you hit the 800 threshold, you’ll likely be approved for a loan and qualify for the lowest interest rate.

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There’s no doubt that consumers are turning to credit cards these days because it’s harder for them to keep up with their spending, and there are many factors, he added, including inflation. But exceptional credit mostly depends on how well you manage your debt and for how long.

He said earning a credit score above 800 isn’t easy, but “it’s definitely achievable.”

Why a high credit score is important

The average national credit score is sitting at all-time high of 716according to a recent the report from FICO.

While this is considered “good,” an “exceptional” score can open up even better terms, potentially saving you thousands of dollars in interest.

For example, borrowers with credit scores between 800 and 850 can lock in a 30-year fixed mortgage rate of 6.13%, but that jumps to 6.36% for credit scores between 700 and 750. For a $350,000 loan, the payment is more the high rate adds up to an additional $19,000, according to LendingTree.

4 Key Factors to a Great Credit Score

Here’s a breakdown of the four factors that affect your credit score and ways to improve that number.

1. Timely payments

The best way to get a credit score over 800 is to pay your bills on time every month, even if it’s making the minimum payment. In accordance with LendingTree 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 the most important factor, accounting for approximately 35% of a credit score.

To get there, set up auto-pay or reminders so you’re never late, Schultz advised.

2. Amounts owed

From mortgages to car payments, having an exceptional score doesn’t mean zero debt, but rather a proven track record of managing a mix of outstanding loans. In fact, consumers with the highest scores owe an average of $150,270, including their mortgage, LendingTree found.

The total amount of credit and loans you use compared to your total credit limit, also known as your utilization rate, is the second most important aspect of a great credit score, accounting for about 30%.

As a rule, it is important keep revolving debt below 30% of available credit to limit the effect a high balance can have. However, the average utilization ratio for those with credit scores of 800 or higher, according to LendingTree, was just 6.1%.

“While the best way to improve that is to reduce debt, you can also change the other side of the equation by asking for a higher credit limit,” Schultz said.

3. Credit history

Having a longer credit history also helps boost your score because it gives lenders a better view of your history when it comes to repayment.

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

Keeping your accounts open and in good standing and limiting new credit card inquiries will work in your favor. “Lenders want to see that you’ve been responsible for a long time,” Schultz said. “I always compare it to a kid borrowing the car keys.”

4. Types of accounts and credit activity

Having a diverse mix of accounts and limiting the number of new accounts you open will further improve your score, as each account for about 10% of the total.

“Your credit mix should include more than just having a few credit cards,” Schultz said. “The ideal credit mix is ​​a combination of installment loans, such as car loans, student loans and mortgages, with revolving credit, such as bank credit cards.”

“However, it’s very, very important to know that you shouldn’t take out a new loan just to help your credit mix,” he added. “Debt is really a serious thing and should only be taken out as necessary.”

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