There are a number of reasons to maintain the highest credit score possible. People who have a credit score of 800 or better have many more options when it comes to financing a home, getting a car loan, or even securing a personal loan to finance a vacation. If you are like most people, your credit score could use some improvement. Here are some tips on how to take your mediocre score and turn it into that golden score of 800 that lenders love so much.
Your first task involves obtaining copies of your credit report from each of the three major credit reporting agencies. Before you can take steps to improve your score, it is a good idea to know what factors are currently holding you back. Keep in mind that viewing one report from one agency will not do the job. It is not unusual for some items to be reported on one report, but be absent from the other two. Only by looking at all three can you get a true picture of how the different agencies determine your credit score.
In some cases, it may be outdated information on one or more of your reports that is keeping your score away from that goal of 800. There is also a chance there may be items listed on your reports that are not even yours. Working with your past and current creditors, as well as the credit reporting agencies to clean up your credit reports will go a long way toward improving your credit score and make you more attractive to lenders.
Along with cleaning up your credit reports, you also need to take a look at how you honor your current commitments. Many creditors report when debtors pay more than the minimum amount due each month. That means that even if you can only manage to pay a few more dollars above the minimum due on your credit cards, do so each month. Whenever possible, pay off a significant amount of your balance and lower indebtedness in general. Consistently paying more than the minimum, as well as making those payments on time, will move your credit score closer to the 800 mark.
You are much more likely to be in line for an 800 credit score if you have at least a couple of accounts that have been around for awhile. A long history with one or two creditors, especially when you’ve made timely payments and periodically paid off the entire balance on each account, demonstrates your stability. At the same time, resist the urge to open a bunch of accounts; if you have only a few that are used with some regularity and are paid off from time to time, your credit score will certainly be higher.
While not everyone realizes it, the relationship between your debt, available credit, and income is very important if you want to achieve an 800 credit score. Obtaining a promotion that involves a significant increase in pay, when coupled with keeping your credit card balances low and limiting the number of accounts you have open, will go a long way toward lifting that credit score out of the 600-700 range and propel you to 800 and beyond. Not only will you be in a better position to manage monthly payments on a mortgage, you will also be considered low risk by the lender and earn a lower rate of interest in the bargain. Over the life of the mortgage, you can literally save tens of thousands of dollars, simply because of your excellent credit rating.
Depending on your current circumstances, you may be able to achieve an 800 credit rating within a few months. People with some issues to clear up may find it takes a few years to reach this exalted rating. But the good news is that you can start the process today, and with some hard work and dedication, you can get that 800 credit score and begin enjoying all the benefits that come with it.