July 18th, 2011
According to Jeanine Skowronski’s MSN Money article “How to get a perfect credit score,” there are approximately one million Americans – or less than one percent of the population – with an absolutely perfect credit score of 850. And while anything above 760 puts you in the same category of great credit, Skowronski highlights the characteristics of the elite one million who have the best reports in the country.
They have a long and impressive history and a clean record. Your credit score is largely determined by your payment history and your amount of debt over time. Skowronski points out that those with perfect credit score tend to use their credit often, and they pay it off on time, every time.
Creditors like to see that your payments actually decrease your debt, and that you aren’t stacking debt on top of debt. So, if you make a $300 car payment, try not to put a $300 purchase on your credit card the same day.
Those with phenomenal credit also tend to be on the older side, which shows that your credit score improves the longer your good credit history is. So, two years of on-time payments with get you a better score than just one year of on-time payments. Unfortunately, improving in that sense just takes time.
They have a diverse set of accounts. There are two types of credit lines: installment accounts and revolving accounts. Installment accounts require consumers to pay a fixed amount each month, like a car payment or student loan.
Revolving accounts limit the line of credit based on your existing score – but the balances fluctuate, and aren’t necessarily paid on a monthly basis. For instance, credit cards are revolving accounts with credit limits, but the amount of credit being used changes with each purchase and payment.
Those with perfect credit have a variety of types of credit, like a few credit cards, a mortgage, and a car loan. This tells creditors that you are financially responsible enough to manage several accounts at once without incident.
They have a limited number of credit inquiries on record. People often open up store credit cards to get a certain deal, like 10 percent off their entire purchase – and then assume that it won’t impact their score unless the card is used. What they don’t know is that too many inquiries within a short time can harm their credit.
Make sure to shop around and chose your credit cards wisely based on the rewards program, rather than opening up too many just for one-time deals.