The Holy Grail of the totality of the credit scores is 850. According to studies, one in every 200 people can achieve this score based on the FICO credit score scale.
Indeed, the benefits of having a perfect credit score are undeniable. This will put the ball completely in the corner of the consumer versus the lender. Oftentimes, the lenders will fight for your business. In almost all instances, you will be offered the best interest rate by the lenders. This means that you will have the lowest possible loan costs and long-term mortgage of any consumer.
So, what does it take to have this level of credit score? It will take some dedication but there are no shortcuts to achieving this perfect credit score. Thus, here are some tips that you can pursuit to have an 850 credit score now.
Don’t Carry a Balance
As much as possible, pay your credit cards every month at Easy Credit. One of the misconceptions of people is that you have to carry a balance on your credit card for you to improve your credit score. However, this is not true. As long as you pay your bill every month, you can see long-term benefits in your credit score. If you pay your credit cards in full, this will help reduce the cost of the goods and services you have bought. This is because you don’t have to pay for the interest. Moreover, this will help keep your aggregate credit utilization down. This comprises 30% of your FICO credit score.
Don’t Check Your Credit Score For Every Month
One misconception is your need to stay on top of your credit score. Your credit score is similar to a roadmap that the money lender can use to decide whether they will loan you the money. If so, what are the interest rates that you can qualify for?
Indeed, it will take lots of data points for you to be a qualified candidate for the lenders. As such, your credit score will take a long time to adjust upward. This is true if the length of your credit history will contribute to about 15% of your FICO credit score.
For some people, it took them 15 years to have an 850 credit score. It is possible that you could do so in a few years but watching your credit score every month will only drive you mad. As such, make sure to limit your credit score checks to two to four times only per year. This will provide you with a bigger picture of your progress.
Increase your Credit Limit
Some consumers resist whenever the money lender offers a credit limit increase or why they fear when they ask for a credit limit. If you are a compulsive spender, this fear must be justified. It is suggested by the experts that the cardholders must embrace the idea of having higher credit limits.
The higher your credit limits, the less likely you are to use 30% of your aggregate credit. Indeed, increasing your credit limit will involve your lender to take a hard look at your credit report. This can result in a temporary loss of a few points on your credit score. But in the long run, it can help lower your credit utilization rate, which can have an impact on your credit score.
Pay Your Bills on Time
One of the most important factors in your FICO credit score at MoneyIQ is your payment history. Although FICO keeps its scoring formula a guarded secret, 35% of your credit score pertains to your payment history. If you have several collections or late payments, your credit score will decrease.
However, even if you have an occasional late payment, it is worthwhile to request the lender to forgive that late payment. This is assuming that you have made your payment and have already updated your account.
Most of us are not perfect and we tend to miss our payments from time to time. You can ask for the late fee, the adverse credit is bent a bit, and the lender might be obliged. For lenders, it will be cheaper to bend a bit with their old customers than spend a lot of money on acquiring new ones.
Set up Automatic Payments
One of the best ways to reduce the possibility of late payments is setting up automatic payments for your credit accounts. When you have your bills automatically deducted from your bank account on a specific date and have it charged on your credit card, you can avoid late payments.
Moreover, paying bills through your bank online is one smart way to reduce the chances of being late with your payments. This will not only avoid running the risk of payment processing and arriving after the due date if you mail your bills, but online banking is quick. It will also make recording a lot easier.
