When it comes to your credit score, the higher it is, the better. Although there are many different kinds of credit scores, most scoring models agree on the highest achievable credit score: 850.
Here’s what you need to know about how credit scores work and how to achieve that perfect number.
On this page
- Why your credit score is necessary
- VantageScore vs. FICO: What is the highest credit score?
- What affects your credit score
- The benefits of having a perfect credit score
- How to reach a perfect credit score
- Frequently asked questions
Why your credit score is necessary
Your credit score is what lenders use to evaluate your risk as a borrower. Whether you’re taking out an auto loan or applying for a mortgage, most lenders will take your credit score into consideration to determine your rates and terms.
In the eyes of lenders, a high credit score demonstrates you are highly financially responsible as a borrower. However, a low credit score may indicate to lenders that you could be risky to lend to and may not repay the funds.
However, the impact of your credit score isn’t limited to your ability to take out credit.
If you’re looking to rent a home, many landlords run credit checks and some may only rent to those above a certain credit score. Some insurance companies (such as auto and homeowners insurance) may also use credit-based insurance scores, though this is prohibited in some states.
Learn more about how to improve your credit score.
VantageScore vs. FICO: What is the highest credit score?
Both FICO and VantageScore, the two most widely used credit scoring models, mark 850 as the highest score out of a base range of 300 to 850.
FICO
FICO is the standard evaluation measure used by 90% of top U.S. lenders since its introduction in 1989. The highest credit score you can achieve with this model is 850.
FICO provides industry-specific scores tailored for auto lenders (FICO Auto Score) and credit card companies (FICO Bankcard Score). These industry-specific FICO Scores have a slightly different score range of 250 to 900, with each emphasizing your financial behaviors with a certain financial product.
FICO also has a unique version of scores for each of the three national credit reporting bureaus — Equifax, Experian and TransUnion.
| Credit rating | Credit score range |
|---|---|
| Exceptional | 800-850 |
| Very good | 740-799 |
| Good | 670-739 |
| Fair | 580-669 |
| Poor | 579-300 |
VantageScore
VantageScore is another credit-scoring model used by lenders to determine your eligibility for credit. It was collaboratively developed by the three credit bureaus — Equifax, Experian and TransUnion.
While it’s less widely used than FICO, it’s still important to track your VantageScore as more than 2,600 financial institutions rely on this model.
Like FICO, the VantageScore 3.0 and 4.0 models range from 300 to 850. The highest credit score you can achieve with VantageScore is 850.
| Credit rating | Credit score range |
|---|---|
| Excellent | 781-850 |
| Good | 661-780 |
| Fair | 601-660 |
| Poor | 500-600 |
| Very poor | 300-499 |
What affects your credit score
Regardless of the model used, your credit score is based on your credit activity.
There are five factors that go into how your FICO credit score is calculated:
- Your payment history: 35%
- The amount of debt you owe: 30%
- The length of your credit history: 15%
- New credit inquiries: 10%
- Types of credit you have: 10%
VantageScore also considers five factors to calculate your score, though they are weighed a bit differently:
- Total credit usage: Extremely influential
- Types of credit: Highly influential
- Payment history: Moderately influential
- Length of credit history: Less influential
- New credit accounts: Less influential
A few things are clear according to this score makeup: You can improve your credit score by paying bills on time and reducing the utilization of your credit limit. Having a long credit history and a healthy mix of credit accounts also help.
If your credit is really bad you can look to improve it with a credit repair company. Be mindful of credit repair scams, as these can cost you quite a bit of money (and some may even get you into legal trouble).
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The benefits of having a perfect credit score
Having an exceptional credit score can provide numerous benefits to consumers, including:
Low interest rates: Whether you’re applying for an auto loan, a mortgage or a personal loan, lenders’ lowest interest rates typically go to those with high credit scores. This can save you a lot of money in interest over the lifetime of a loan.
Unique perks: Some lenders with high minimum credit score requirements provide unique perks to borrowers.
More options with lenders: If you have a perfect or even excellent credit score, you may have an easier time qualifying for credit. This can provide you with more options to choose from when you shop around for lenders, allowing you to be more choosy when it comes to picking one.
Credit card promotions: With an excellent credit score, credit card companies may be willing to offer you promotions such as 0% intro annual percentage rate (APR) credit cards. These types of credit cards come with an interest-free introductory period, sometimes as long as 21 months.
Lower car insurance rates: If you live in a state where credit-based auto insurance is legal, you may be able to save money by paying a lower monthly premium.
Easier time renting: Some landlords require that you meet a minimum credit requirement in order to rent property. Having an excellent credit score can make it easier to rent a home.
How to reach a perfect credit score
Make on-time payments
The number one rule is making on-time payments, as payment history is the largest component of your score. If you are concerned that you may miss payments, set up payment reminders or autopay to ensure that your monthly bills are paid on time.
A missed payment can cause your credit score to drop by as much as 180 points, so it’s important to keep careful track of your due dates.
Keep your credit utilization below 30%
It’s also key to keep your credit utilization ratio low. Your credit utilization ratio is the percentage of your available credit currently being used. Using a high percentage of your available credit could indicate that you are overextended and may be more likely to miss payments.
A good utilization ratio is generally considered to be 30% or lower. That means a credit balance of lower than $3,000 balance for a $10,000 credit limit.
Keep in mind your credit utilization ratio is calculated based on the overall credit you have across all of your revolving credit accounts (like credit cards).
Keep old credit accounts open
Having a longer credit history generally indicates that you practice good credit habits and are less risky as a borrower. Try to avoid closing your old credit accounts, even if you don’t use them. (Having the additional open credit will also help your credit utilization ratio.)
Credit scoring models consider the age of your oldest and newest accounts, as well the average age of all of your accounts. Closing your old credit accounts will likely lower your average account age. To keep the account from being classified as “dormant,” you can charge one small item each month and set the bill to be paid in full via autopay.
Avoid opening new accounts frequently
While it’s important to have a number of accounts, it’s not wise to apply for a bunch of new credit cards in a relatively brief period of time. Multiple hard credit pulls can lower your credit score. More new accounts generally pose more risk to lenders, and they will also reduce the average history of your credit accounts.
Have a diverse credit mix
The type of credit accounts you use makes up 10% of your FICO Score. The more diverse your credit mix, the higher your score is likely to be. Besides credit cards, many consumers have mortgages, car loans and other types of installment loans.
But if you have a fairly healthy score and don’t need these other loans, it’s not necessary to apply for them just for the sake of having a stellar credit score. After all, the impact of credit mix is relatively modest.
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