Truthfully, the highest credit score is not the score you should be shooting for. The whole point of a credit score is to get you the best rates and credit limits when you are applying for loans and credits. While it seems like the highest score would get you the best rates, you actually don't even need to aim that high.
What Is the Best Credit Score You Can Receive?
The best credit score you can get on the FICO scale is a 850, but that score is near impossible to attain. You would need to have the perfect storm of credit utilization (probably zero balances with very high credit limits), a long spotless credit history, and no negative marks on your credit report, which is nearly impossible. And even with all of those factors, 850 can still be unattainable. So what score should you be shooting for?
What Is the Optimal Credit Score?
If you are looking for the best rates and the highest credit limits, you should aim for a credit score of 760, according to FICO. Anything above a 760 is just going to be for bragging rights, since a score of 760 or above will get you the best rates and credit limits. Most businesses use similar cutoff points when determining your rate or credit limit. Say you have below a 700, you might be in a different bracket with higher rates than someone with a 705, so always make sure you are doing everything you can to keep your credit score as healthy as you can.
How to Get the Optimal Credit Score
1. Keep paying things on time: The most important thing to remember is to keep your credit report clean from here on out. Pay your bills on time. Make sure you aren't over your limit on any of your credit cards. Keep the balances on your credit cards low. Keeping your finances clean is the best way to raise your score.
2. Don't cancel any of your credit cards: This may seem counterintuitive, but canceling credit cards actually lowers your credit score. Part of your credit score is based on how much credit you utilize (your credit utilization score), so the more credit you have available, the higher your credit score. If you cancel a credit card, you no longer have that credit available, which lowers your credit utilization score, which in turn lowers your credit score. Even if you've paid off a credit card, keep it open and gather up the extra points you get from having that extra line of credit.
3. Open the lines of communication with your credit card lenders: If a bunch of credit card debt is keeping your credit score down, talk with your credit card lenders to see if you can strike a deal to pay off that debt. Many lenders are open to making deals with you, since all they are really after is the money you owe. Just remember, if you do make a deal with a lender, ask them how they will be reporting it to the credit bureaus. They have two options: "Paying as agreed," which won't hurt your credit score, or "Not paying as agreed," which could bring your credit score down. Make sure they are reporting it as "paying as agreed" before you agree to any deal. If you don't know how to do this, you can try signing up for a credit repair service that can help you raise your score.
4. Sign up for a secured credit card: If your credit is so bad that you keep getting denied for a credit card or loan, try signing up for a secured credit card. Since you put down a deposit for a secured credit card, it doesn't matter how bad your credit is, secured credit cards are available for everyone. Just make sure to apply for a card that reports to all three credit bureaus, otherwise having the extra line of credit won't affect your credit score.
5. Make sure there are no mistakes on your credit report: Over 42 million people in this country have errors on their credit report, and 10 million of those have errors that affect their credit score. Make sure you are regularly checking your credit report to make sure there are no mistakes and that you haven't been a victim of identity theft. Fixing simple mistakes on your credit report can be a quick way to boost your score.
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