How to achieve a credit rating in 800 points: 8 steps
The credit rating in the United States ranges from 300 to 850 points. A rating of 300 to 579 is considered very low, 580 to 669 is average, 670 to 739 is good, 740 to 799 is very good, 800 or higher is exceptional.
Having an exceptional credit rating, you can get loans on more favorable terms and at low interest rates, the newspaper writes GO Banking Rates.
How to get a credit rating in 800 points
Getting a loan in 800 points requires a lot of time and a good payment history. But there are other things you can do to get a high credit rating.
1. Know the facts
As soon as you can answer the question: “What is the perfect credit rating?”, You can proceed to the process of achieving it. First, you need to find out what rating you currently have.
Once a year, you can request a free credit report from the three leading credit reporting companies in the country: Experian, Equifax or TransUnion. If you notice any problems there, you should immediately proceed to fix them.
2. Create a long credit history
Lenders usually view borrowers with short credit histories as carrying higher risk. To reach 800 points, you will need to create and maintain a long credit history, so keep old credit accounts, even if you no longer use them and do not have a balance on them, do not rush to remove them from your credit account.
3. Pay your bills on time
The payment history is extremely important when it comes to achieving a perfect credit score. Paying bills late will reduce your total credit score. Consider subscribing to automatic payments on regular invoices.
4. Review credit card use
30% of your credit rating consists of the credit utilization rate. To calculate it, you must divide your debt on the card by the total amount of credit available to you. Well, if the credit utilization rate is no more than 30%, that is, if you have a credit card with a limit of 1000 dollars, in order to maintain an ideal credit rating, you should use no more than 300 dollars of this amount. Increasing debt can negatively affect your credit rating.
5. Diversify your credit accounts
You can increase your credit rating by diversifying your accounts. This does not mean that you must open 10 of various credit cards; This means that you must have different types of loans, such as a mortgage loan, car loan, student loan, and several credit cards.
6. Cut costs
One way to get close to 800 credit scores is to create a budget that you can stick to so that it limits your spending to what you can afford. While your income does not affect your credit score, living within your means can improve your credit score.
7. Limit your liability
When you become a guarantor, you risk your credit rating, if that person does not pay the debt on time, it can lower your credit rating, since you are also responsible for this debt. If you need the highest credit rating that you can get, you should not act as a guarantor.
In addition, immediately report lost or stolen credit cards, so as not to be responsible for the amounts that the attackers steal from them.
8. Limit the number of hard requests
When you - or someone else - request a credit report, it is called a request. A soft request that usually does not affect your credit score occurs when you:
- Check your credit report.
- Give a potential employer permission to check your credit rating;
- Allow the financial institution with which you do business to check your credit rating.
A hard inquiry that may affect your credit rating occurs when a company requests a report on your credit rating after you have applied for a mortgage loan or credit card. Try to limit the number of such requests as much as possible.
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