By Calvin Russell
As a Certified FICO Professional, one of most asked questions I get is, “What do I have to do in order to achieve an 800 or above credit score?” After viewing over 400 credit reports of High FICO Score Achievers, there are about 5 habits that they all have in common.
- Less than 4% of 800+ score holders haven’t had a late payment on any account in the last 7 years! With the FICO scoring model, 35% of your credit score comes from payment history. This is the biggest % of what makes your score next to “Amount Of Debt Owed” (30%). Be sure to make those payments on time as 1 “Late Payment”(30 days or more) is equivalent to 3 “On Time” payments.
- Most 800+ score holders keep their revolving debt, (credit and department store cards), under 7%-10%. What does this mean? For example: If your credit card has a limit of $1000 and your current balance is $400, you are at 40% of your limit. This is great because you are not over your limit but, it’s not practicing 800+ score habits. In this scenario, an 800+ score holder would have their balance at $100 or under! Why is it called a “Revolving Account/Debt?” The term “Revolving” is used because the amount owed is always changing +/- depending on the charges used by the account holder. The other type of account that you will see on a credit report is an “Installment Loan/Account.” An “Installment Loan/Account” could be a car loan, student loan, personal loan, etc. In short, pay those revolving debts down and keep them under 7%-10%.
- Have you had that credit card account open for 3 years? Great! That alone won’t get you in the 800+ Club. Have you finished paying for those student loans in 6 short years? Wow! Even better, but that alone still won’t get you in the 800+ Club. Do you know why? 800+ score holders have an average credit history of 8-10 years or more on their NEWEST/LATEST account. That means that they keep their accounts open for years to come. This is important as 15% of your credit score comes from “Length of Credit History.” If this is the case, why would a person close their account? The answer usually is because they don’t use it. That’s fine, but don’t close that account as it resets the average length of credit history time.
- Some people have 1 credit card. Some people have 2 credit cards. Some people decide to live on the edge and have 2 credit cards and a department store credit card. These are examples of people building their credit, but not for achieving an 800+ score. The average amount of accounts open for an 800+ score holder is 8-11 accounts and they are usually a mixture of 3-4 installment loans and 5-7 revolving accounts.
- One of the most important habits of 800+ score holders is the absence of collections, civil judgments, bankruptcies, tax liens, or child support on their credit reports. In some cases, some 800+ score holders have had one or two of those over 7-10 years ago and it’s no longer on their credit report. Remember, over time, negative marks on your credit report will remove themselves in 7 years and Chapter 7 bankruptcies in 10 years, but that does not mean accounts are paid in full. Accounts that are not paid in full become collections and they are sold again and again to keep the collection up to date.
The Bottom Line
Now you know the Top 5 Habits of High FICO Score Achievers. Remember, you don’t have to be great to start, but you do have to start to become great. Start these habits today and you will see the results quicker than you think.
Calvin Russell Jr. is a Certified FICO Professional and the CEO & Founder of Simply Professional Credit Consultation. SP Credit Consultation has helped hundreds of people increase their credit scores, qualify for homes, cars, and lower interest rates with their personal, Step-By- Step Action Plans.
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