Did you know that less than 1% of the United States population has “perfect credit?” The credit scale ranges from 300 to 850, and believe it or not, you too can reach that magical 850. All it takes is the mastery of a few key traits, and you’ll be a part of that 1% in no time:
- Keep the amount owed on all credit accounts less than 30% of your limit.
- Make sure you never have major discrepancies e.g. bankruptcy or foreclosure.
- Keep most of your accounts open for a long time, at least 10 years because you need at least 10 years of positive history to get anywhere close to 800 on your FICO score.
- A few “installments” in good standing e.g. auto loans or mortgage.
- Minimal late payments, overdraw charges, or any other account issues.
In addition to mastering these details, you really need to be checking your credit report at least once a year. This can help ensure that all your information is accurate and up to date. A quick tip, is that from each of the three major credit bureaus, Experian, Equifax, and TransUnion offer you one free peak at your report once a year.
If for any reason after you’ve checked up on your credit report you find an error, fix it immediately. The faster you correct the mistake, the more likely you are to survive the battle. Also, keep in mind that if you have a few defaults, like a missed payment or two, it isn’t the end of the world. Let the bad behavior be as it stands and in ten or so years, it won’t have as big an impact on your score anymore because it will be considered old news.
The last thing to remember, is to stick to your good credit building routine. Slide off the track for a few weeks, and your hopes of achieving perfect credit will slide off the track with you. Spend smartly with your credit always in the back of your mind, and you will do just fine.
Your credit report is the basis for your financial standing. No matter how slick or smart you may be, no bank will touch anyone with a low credit score. It's their money, why would they want to take a bigger risk than they need to?
If you don't know where your credit report score is at, now's the time to take a peek. Don't get surprised with a low credit score when you go in to review your report with a potential lender or even an employer, find out for yourself within minutes.