What’s the highest credit score possible?

Key Takeaway
Your credit score can open financial doors (or slam them hard in your face.) But, how do you know what's good and what's bad? We'll decode the numbers for you and show you how to acheive the highest credit score possible.

What’s the Highest Credit Score Possible?

At Homebody, we’re more than just your gateway to affordable insurance. We’re also dedicated to helping you navigate the often confusing world of finance. 

Today, we’re exploring the highest credit score possible, and why it matters to people like you. Let’s start by understanding the basics, and then we’ll move on to how you can gamify your finances to take your life to the next level with Homebody’s unique free credit re-building opportunities. Let’s begin!

What Do I Do If I Don't Have a Credit Score? A Step-by-Step Guide for Building Credit with Limited History

Step #1. Understand the Importance of Building Credit

Step #2. Open a Secured Credit Card

Step #3. Become an Authorized User

Step #4. Explore Credit Builder Loans

Step #5. Pay Bills on Time

Step #6. Apply for a Starter Credit Card

Step #7. Monitor Your Credit Report

Step #8. Keep Credit Utilization Low

Step #9. Establish Stable Income

Step #10. Be Patient and Persistent

Step #11. Avoid Common Mistakes

Step #12. Use Homebody’s Rent Credit Reporting

What’s the highest credit score possible?

The FICO credit scoring model, which is one of the most widely used credit scoring systems in the United States, has a maximum credit score of 850

This is often considered a perfect score. However, different credit scoring models may have different score ranges, and what constitutes a "perfect" or "highest" score can vary. For example, the VantageScore 3.0 and 4.0 have a maximum score of 850, but different ranges and criteria about what matters in your overall credit profile. 

So, if you’ve got perfect credit, congratulations! However, if you’re like most people out there, you should know that, while achieving a perfect score is admirable, it’s not the end-all-be-all for securing credit or scoring a lower interest rate. 

Here’s why: Once your credit score is within a certain range (generally considered "excellent"), you're likely to receive the best terms and rates available. Different lenders might also use their own proprietary scoring models (like the VantageScore), which can have slightly different score ranges and criteria.

Remember that your score is just one factor that lenders consider when making lending decisions. They also look at your credit history, income, debt-to-income ratio, and other factors. In other words, even a perfect score isn’t a guarantee that you’ll receive the best loans possible.

Understanding the importance of your credit score

A credit score is a number lenders use to assess your creditworthiness. Essentially, it indicates the likelihood that you will repay your debts. 

Two of the most popular credit score models are FICO and VantageScore. only FICO scores and VantageScore lists their scores as follows:

FICO vs. VantageScore

Real world example: 30-year mortgage

Want to see the power of a perfect credit score versus a less-than-perfect one. Here’s an example of a 30-year fixed-rate mortgage between two types of borrowers:

Borrower A - poor credit score:

  • Credit score: 600 
  • Loan amount: $250,000 
  • Interest rate: 5.5%
  • Monthly payment: $1,419.47

In this scenario, with a credit score of 600, Borrower A receives an interest rate of 5.5% on their mortgage loan.

Borrower B - perfect credit score:

  • Credit score: 850 (perfect score) 
  • Loan amount: $250,000 
  • Interest rate: 3.0%
  • Monthly payment: $1,054.54

With a perfect credit score of 850, Borrower B qualifies for a lower interest rate of 3.0% on their mortgage loan.

Comparing the two scenarios:

  • Borrower A (poor credit score): monthly payment of $1,419.47
  • Borrower B (perfect credit score): monthly payment of $1,054.54

In this example, Borrower B with the perfect credit score gets a significantly lower interest rate, resulting in a monthly payment that is over $360 lower compared to Borrower A with the poor credit score. Annually, this means a savings of $4,320. And over the course of a 30-year mortgage, this is a whopping $129,600 difference.

Are you seeing just how powerful a credit score can be?

What can I use a perfect credit score for? The benefits of having a perfect credit score

The importance of your credit score can’t be understated. Wherever money is involved (including employment), your credit score is a factor in determining how you’re treated. To give you an idea of what a perfect credit score can do for you, let’s look at the top benefits that come with having a perfect credit score:

Access to the best loan rates

With a perfect credit score, you're likely to qualify for the lowest interest rates on loans, including mortgages, auto loans, and personal loans. This can result in substantial savings over the life of the loan.

Favorable credit card terms

Credit card issuers offer premium rewards, higher credit limits, and lower interest rates to individuals with excellent credit scores. Having a perfect score enhances your eligibility for these advantageous credit card offers. In other words, you won’t have to deal with high APR credit cards that could potentially sink you into crippling debt. 

Easier approval for rentals

Having a hard time finding a new rental? Well, you should know that landlords often check credit scores when evaluating rental applications. A perfect credit score can make you a highly desirable tenant and increase your chances of getting approved for your desired rental property.

Employment opportunities

Some employers consider credit scores during the hiring process, particularly for roles involving financial responsibilities. A perfect score can improve your chances of landing you the job you want.

Better insurance premiums

Insurance companies may offer lower premiums to individuals with excellent credit scores. This applies to various types of insurance, including auto, home, and renters insurance.

Negotiating power

Whether you're negotiating interest rates, terms, or fees with lenders, having a perfect score can give you stronger bargaining leverage and potentially better deals.

Qualification for high-value purchases

When making major purchases, such as a home or car, a perfect credit score can help you secure financing more easily and at the most favorable terms.

Streamlined approval processes

Lenders and financial institutions are more likely to expedite the approval process for people with higher scores due to the lower risk associated with lending to them.

Lower security deposits

Security deposits are notorious stumbling blocks for renters looking to upgrade their living situation. Utility companies, cell phone providers, and landlords may require smaller or no security deposits from individuals with perfect credit scores due to their proven financial responsibility.

However, if you need help getting your security deposit in order, Homebody offers a Security Deposit Alternative. Instead of forking over $1,500 for a security deposit, you pay small insurance premiums (ex. $15/month), saving you hundreds while not incurring a huge upfront cost..

Prestige and confidence

Achieving a perfect score showcases your financial discipline and responsibility. It can provide a sense of accomplishment, boost your confidence, and enhance your financial reputation.

Having a perfect credit score opens doors to numerous financial benefits, giving you opportunities to save money, access favorable terms, and enjoy a higher level of financial flexibility and security.

What factors affect credit scores?

It’s pivotal to understand that your credit score isn’t just a random number. It's a reflection of your financial behaviors. 

Let's break down the factors that determine your score:

Payment history

Makes up 35% of your score.

Your track record of paying debts on time. Late payments can negatively impact this.

Credit utilization

Makes up 30% of your score.

This refers to how much of your available credit you’re using. A lower percentage can mean a higher score.

Length of credit history

Makes up 15% of your score.

This looks at the age of your oldest account, the age of your newest account, and an average of all accounts.

Types of credit in use

Makes up 10% of your score.

Having a mix of account types, like credit cards, retail accounts, and installment loans, can be beneficial.

New credit

Makes up 10% of your score.

Opening several credit accounts in a short period of time can represent greater risk, especially for people with short credit histories.

Achieving perfect credit: a breakdown of key factors

Payment history (35%)

Your payment history is a crucial component of your credit score, accounting for 35% of your score. This aspect reflects your consistency in repaying debts on time. Timely payments demonstrate responsible financial behavior, positively impacting your score. Late payments, defaults, or accounts in collections can have a negative effect on this category.

To attain a perfect payment history, prioritize making all payments on time. Set up reminders, automate payments, and establish a solid payment routine to maintain a flawless payment history.

Credit utilization (30%)

Your credit utilization ratio, which makes up 30% of your credit score, refers to the ratio of how much credit you're using compared to your total available credit limit. A lower utilization percentage suggests responsible credit management and can contribute to a higher credit score.

To approach perfect credit, keep your credit utilization low. Aim to use a small portion of your available credit, preferably below 30%. This demonstrates your ability to manage credit responsibly and positively impacts your score.

Length of credit history (15%)

The length of your credit history contributes 15% to your credit score. This factor evaluates the age of your oldest and newest accounts, as well as the average age of all your accounts combined. A longer credit history can indicate stability and experience in managing credit.

To work towards perfect credit, focus on building a positive credit history over time. Keep older accounts open, even if they have low activity, to contribute to your overall credit history length.

Types of credit in use (10%)

Having a diverse mix of credit accounts, such as credit cards, retail accounts, and installment loans, accounts for 10% of your credit score. A well-rounded credit profile can demonstrate your ability to manage different types of credit responsibly.

To aim for perfect credit, consider diversifying your credit portfolio over time. However, avoid opening new accounts solely for the sake of variety, as this can negatively impact your credit in the short term.

New credit (10%)

New credit accounts for 10% of your credit score. This factor assesses how frequently you open new credit accounts, which can be risky, especially for individuals with limited credit histories.

To strive for perfect credit, be cautious when opening new credit accounts in a short period. Rapidly opening multiple accounts can signal increased risk to lenders. If you're building credit, focus on establishing a positive payment history and gradually adding new credit as needed.

Good credit habits vs. poor credit habits: Key characteristics of people with the highest credit score

In the previous section, you learned about factors that affect how your credit score is calculated by lenders. Consistent, responsible financial behavior is obviously the key across these factors, but how do they actually look in real life. 

To illustrate what good credit habits look like versus poor credit habits, we’ve broken down a few actionable examples:

People with good credit habits

1. Responsible credit utilization

Maintain a low credit utilization rate: Responsible individuals with good credit scores understand the importance of keeping their credit utilization rate low. They aim to use a small portion of their available credit, making sure their credit usage remains well below their credit limit.

2. Strategic account management

Preserve open credit accounts: Individuals with good credit scores are wise about keeping their older credit accounts open. This practice contributes to a longer average account age, which positively impacts their credit score. They're cautious about closing accounts, as doing so might lower their overall credit limit and increase credit utilization.

3. Diligent credit monitoring

Regularly monitor your credit reports: Those with good credit scores are diligent in monitoring their credit reports. They proactively review the information for inaccuracies and outdated data. Recognizing that positive information can disappear after a year, they stay vigilant about maintaining accurate records. They assess their credit health, explore opportunities for improvement, and choose to receive weekly reports for continuous monitoring.

4. Striving for excellence

The following steps are not just good habits–they underlie every perfect credit score. Pay attention the following:

  • Timely payments are key: Individuals with good credit scores understand the significance of paying bills on time. Use reminders and automated payments to avoid any missed deadlines.
  • Maintain low credit utilization: Make a conscious effort to utilize only a small fraction of their available credit, showcasing your responsible credit management. This means paying more than the minimum balance when possible. 
  • Minimize unnecessary credit applications: Now that you recognize the impact of hard inquiries, you can refrain from applying for unnecessary credit, safeguarding your credit score.
  • Regularly check your credit report: Be a diligent credit monitor and regularly inspect your credit reports for errors or discrepancies. Take swift action to correct any issues.
  • Diversify your credit mix: Over time, you can work towards having a balanced mix of different credit types (such as mortgages, credit cards, auto loans, etc.). This demonstrates your ability to handle a variety of credit responsibly, impressing potential lenders.

People with poor credit habits

1. Irresponsible credit usage

Neglecting credit utilization: Individuals with poor credit scores often disregard their credit utilization rate. They may utilize a significant portion of their available credit, which negatively affects their credit score.

2. Hasty account actions

Indiscriminate account closure: Those with poor credit scores might impulsively close credit accounts without considering the consequences. This can lead to reduced credit limits and higher credit utilization.

3. Overlooking credit reports

Neglecting credit report monitoring: People with poor credit scores might neglect reviewing their credit reports regularly. They may miss inaccuracies or outdated information, leading to potential credit score setbacks.

4. Missed opportunities for improvement

Lack of financial discipline: Individuals with poor credit habits might miss payments or delay bill payments, impacting their credit score negatively. The inability to plan for or see the big picture in the long-term means that improving your credit is an afterthought or just a “happy accident." 

5. Limited credit management

Limited credit mix: People with poor credit scores might lack diversity in their credit types (for example only having credit cards with no loans on your credit history), which can limit their ability to demonstrate responsible credit management to potential lenders.

What do I do If I don't have a credit score? A step-by-step guide for building credit with limited history

Now you know what a perfect score is, how it’s calculated, and which habits separate the good credit holders from the poor credit holders. However, what do you do if you're starting from zero credit or a limited history?

If you’re ready to take action to build your credit and don’t have a credit history, you’re not alone. Here's what to do.

Step #1. Understand the importance of building credit

We’ve covered this, but recognize the significance of having a credit history. A positive credit history can help you qualify for loans, secure better interest rates, and establish your financial reputation. In other words, dream big–perfect credit is easier to establish than you think!

Step #2. Open a secured credit card

Consider applying for a secured credit card. These cards require a security deposit, which becomes your credit limit. Use the card for small purchases and ensure timely payments to build a positive credit history. 

Note: Secured credit cards can become an issue for some people, as many businesses don’t post their transactions until days after a transaction. This can still lead you into hot water when making purchases, as you’ll have a negative balance that… you guessed it, damages your credit. 

Step #3. Become an authorized user

Got someone you trust? Ask a family member or friend with good credit to add you as an authorized user on their credit card. Their positive credit history can reflect on your credit report, boosting your credit profile. 

Be advised that poor financial behavior on your part can reflect on their credit report (and vice versa), so only choose people that are financially reliable and understand your situation. 

Step #4. Explore credit builder loans

Some financial institutions offer credit builder loans designed to help you establish credit. These loans typically involve making payments that are held in an account or personal loan, and released to you once the loan is paid off.

Step #5. Pay bills on time

Of all the steps listed in this section, this one’s the most obvious: Consistently pay your bills, such as rent and utilities, on time. Although these may not directly impact your credit score, some services report payments to credit bureaus, which can contribute to your credit history.

Pro Tip: Consider paying your bills ahead of time if you can afford it. Not only is it one less financial worry on your mind, but some companies–such as insurance companies–actually give you discounts.

Step #6. Apply for a starter credit card

Look for credit cards specifically designed for individuals with limited or no credit history. These cards may have lower credit limits and slightly higher interest rates, but they can help you begin building credit. 

Step #7. Monitor your credit report

Regularly review your credit report for any errors or inaccuracies.

Step #8. Keep credit utilization low

If you have a credit card, keep your credit utilization low by using only a small portion of your credit limit. Aim to use no more than 30% of your available credit. This means that if you have a $2,000 credit balance, you should spend no more than $600 at a time (unless you’re able to pay this sum down below 30% before your monthly bill is posted.)

Step #9. Establish stable income

Lenders may consider your income when evaluating your creditworthiness. Having a stable source of income can positively influence your credit-building journey.

Step #10. Be patient and persistent

Building credit takes time, especially when starting from scratch. Be patient, make responsible financial decisions, and watch your credit history gradually grow.

Step #11. Avoid common mistakes

Stay cautious about applying for too much credit too quickly. Multiple credit inquiries can lower your credit score temporarily. Additionally, prioritize making on-time payments to avoid negative marks on your credit report.

Step #12. Use Homebody’s rent credit reporting

If you’re a renter, you should know that your rent payments are NOT reported to credit agencies. Luckily, Homebody offers Rent Credit Reporting, which enables you to earn credit for something you’re already doing monthly. 

Understanding high credit scores: Frequently asked questions (FAQ)

How often do credit scores update?

Credit scores typically update on a monthly basis. However, the frequency can vary depending on when your lenders report your financial activity to the three credit bureaus themselves.

Can I have a perfect score with a short credit history?

Achieving a perfect score with a short credit history is challenging, but possible. Responsible financial behavior, such as making timely payments and keeping credit utilization low, can contribute to a high score. Keep in mind that the length of your credit history does play a role in your credit score, so patience is important.

Is it beneficial to have the highest credit score?

While having the highest credit score is an accomplishment, you don't necessarily need a perfect score to obtain the best interest rates and terms. Lenders often offer the most favorable terms to individuals with credit scores in the "Very Good" or "Excellent" range.

How can I check my credit score?

You can access a free credit report once a year from each of the three major credit bureaus: Equifax, Experian, and TransUnion. For your credit score itself, you might need to pay a fee, or you can check with your credit card provider, as many offer free access to your credit score.

Do all lenders use FICO or VantageScore?

Not all lenders use FICO or VantageScore models. While these are commonly used, lenders may have their own scoring models or criteria for evaluating creditworthiness. It's a good idea to inquire with lenders about the specific scoring model they use.

Has anyone got a 900 credit score?

A credit score of 900 is not achievable as credit scores typically range from 300 to 850. An 850 credit score is considered the highest achievable score.

Is a credit score over 900 good?

Since credit scores typically range from 300 to 850, a credit score over 900 is not applicable within the common scoring range.

How good is a credit score of 830?

A credit score of 830 is considered excellent and falls within the highest credit score range. This score indicates strong creditworthiness and may qualify you for the best interest rates and terms.

Is 760 a good credit score?

Yes, a credit score of 760 is generally considered good. With this high credit score, you're likely to qualify for favorable terms on loans and credit products.

What is a good credit score to buy a house?

The minimum credit score required to buy a house can vary depending on the type of mortgage and the lender's criteria. While some loans might have a minimum requirement as low as 500, a credit score of around 620 is often needed to qualify for a conventional mortgage. The better your credit score, the more favorable terms you can potentially secure for your mortgage. Lender requirements may differ based on the level of risk they perceive.

While aiming for the highest credit score is a commendable goal, what's most essential is understanding the factors that influence your score and consistently making responsible financial decisions. 

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