A lot of people believe there’s a certain kind of magic in numbers — and for many, there is, especially when we’re talking about credit scores. Credit scores can make or break your ability to qualify for a low-rate mortgage or get that apartment of your dreams, but it can be difficult and frustrating to really reach the highest tiers of credit credentials.
Experian recently released a report that said 22% of Americans have exceptional credit, which is defined as a score of 800 or higher. A score this solid can change a person’s life, and their budget, for the better, but 78% of Americans aren’t there yet. They can be, though, with time and effort.
Who has an 800 credit score?
Although people with 800 credit scores seem as if they must have everything together in life, it takes more than that to score so high. For example, my father has a decent credit score, but he refuses to use credit cards or borrow money except for purchasing real estate. Because of this, his score is not where it could be, and certainly isn’t at 800.
He’s never missed a payment in his life, but because he can’t demonstrate that he’s responsible with unsecured debt or auto loans, credit agencies refuse to score him where he belongs — up there at the top of the heap.
People with 800 credit scores have different profiles than those with lower credit scores. An average 800 credit score holder, according to Experian research, has:
- 4.8 credit cards
- $3,873 in credit card balances
- 3.5 retail credit cards
- $402 in retail credit card balances
- $21,799 in auto loan balances
- $256,946 in mortgage balances
- $17,484 in non-mortgage balances
- 7% credit utilization ratio
- 0.01 total tradelines ever delinquent
In addition, 45% of 800 credit score holders are aged 59-77 and an additional 23.7% are ages 43-58. It makes sense, since credit takes time to establish and build.
As I am fond of telling people, you have to use your credit to rack up a score like an 800, because you must prove you can be responsible with it. And this is why my father isn’t at 800 — he doesn’t believe in using anything like this much credit. Instead, he’d much rather pay as he goes, which is admirable — and you certainly can’t fault him for it.
How you can raise your credit score
You’re honestly unlikely to ever really need an 800 credit score in this life, but if that’s a goal you have, there are ways to get there. The two most important factors are simply time and patience, as it takes time to demonstrate that you’re not going to let your debt become unmanageable, and that you’ll pay your payments, even when times are tough.
In more concrete terms, though, credit agencies look for five main elements to determine your credit score. Here they are, and how they’re weighted for a FICO® Score in particular.
Payment history (35%)
Payment history is the most important factor in your FICO® Score, and it all goes back to those on-time payments. Missing a few payments here and there may not hurt anybody, but it will hurt your credit score.
Amounts owed (30%)
It’s not really how much you owe that’s the problem, but how much you owe relative to how much you could owe. So, for example, if you have a $10,000 credit card and you charge up $9,000 of it, that’s not going to be great for you.
In 2023, the average credit card utilization rate in the U.S. was 29%, just a little bit lower than the generally recommended 30%. However, the lower you can go (for example, by paying your credit cards in full every month), the better.
Length of credit history (15%)
The length of your credit history matters, but there’s a trick to this. Not only does this consider your oldest account, but it looks at the average tenure of all your accounts. So, if you have one credit card you’ve had for 20 years, and then suddenly open three new ones, your length of credit history will go down dramatically. Better to close newer cards if you don’t need them, or better yet, not apply for new credit at all except when you have a purpose for it.
Credit mix (10%)
If you note the features of an 800 credit score holder, there are a lot of different kinds of credit with balances. This is because credit mix matters. It’s not enough to be able to pay a mortgage or a car loan, you must be able to pay one of each. The better your mix, the better this part of the score is.
New credit (10%)
As mentioned above in credit history, new credit is not your friend, no matter how many offers you get in the mail. Choose your new accounts wisely, and most importantly, don’t accumulate too many inquiries, since these will hurt you in the long run and take two years to fall off your credit report.
800 credit scores are possible
Credit scores of 800-plus don’t happen overnight, but they are certainly possible with careful planning, a long-term vision for your credit file, and lots of patience. Believe in the process — you’ll get there before you know it.
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