Why (and How) to Behave Like Someone With an 800+ Credit Rating
Every borrower wants a high credit rating, but what does it take to get a FICO credit rating above 800? A new LendingTree survey offers some insight into borrowers’ spending habits with the highest scores possible – some of which you can repeat to improve your own score.
What it takes to get a credit rating above 800
Lenders have their own thresholds for how they determine interest rates, but in general you will be eligible for better credit card and loan deals with a super-first-class FICO credit rating (720-850) versus Prime (690 and 719). Since the average FICO score in 2021 is 711 , borrowers may want to increase their scores so that they can be classified as super-prime. With that in mind, here’s a look at the habits of consumers with a credit score of over 800:
- They make stable on-time payments every month: On-time payments account for 35% of your credit score, so it should come as no surprise that this is an important factor for the ratings of super-tier borrowers. Even if you have a brilliant payment history, a single late payment of more than 30 days can lower your credit score by as much as 100 points.
- They have a good credit mix: your credit mix determines 10% of your credit rating, so having different credit accounts – be it revolving debt like credit cards, installment loans, or mortgages – can help improve your rating. Those with an FICO rating of 800 or higher have an average of 7.9 open credit accounts.
- They only use a fraction of their credit lines each month: This is where super-tier borrowers really do well as they only use 5.7% of the available credit. In contrast, the average loan utilization rate is much higher – 28% for 2020 . Despite the availability of all kinds of lines of credit, these borrowers either do not use most of their debt or pay off their debt immediately after purchase. Either way, this has a big impact, as the use of credit accounts for 30% of your credit rating.
- They have very old lines of credit: your credit history – the time during which you had lines of credit – is 15% of your credit rating, so it makes sense that borrowers rated over 800 will have lines of credit that will open. decades ago. The oldest active account for those with 800 points and above, the average age is over 27 years.
Bottom line
Spending habits affect your score, but keep in mind that there is diminishing returns here too: once you hit 760 points or so, you are more likely to hit the same conditions as the person with the higher score. 800. However, if you are looking to boost your score, on-time payments, ultra-low credit utilization and various lines of credit will go a long way. More tips for improving your credit score can be found in this Lifehacker post .