Are you tired of your low credit score? Do you want to improve this? Learn how to get a credit score of 800 and maintain it in the next few steps.
Whenever the word credit appears, it also appears credit score. Whether you are looking for a personal loan, a car loan or an equity loan, lenders will always want to know your credit score. This is a measure of your creditworthiness as assessed by various credit rating agencies.
In general, major credit rating agencies like it FICO and VantageScore ranked this rating between 350 and 850. 350 is the lowest rating and 850 is the highest. The higher your credit score, the greater your chances of being approved for a loan application.
So how hard is it to achieve that high score?
Well, your credit score is determined by a variety of factors, including payment history, credit mix, credit utilization, and so on. Credit agencies get this information from credit bureaus like Experian, Equifax and TransUnion to help you with the assessment.
In fact, achieving a high credit score is not easy as it is also not too complicated. Today, we explore various strategies on how to obtain a credit score of 800 and above. So if you want to manage your personal finances and improve your credit score, you need to do the following.
The best tips on how to get a credit score of 800
1. Commit to reducing your debt
Debt repayment is one of the easiest ways to improve your credit score. Fortunately, that doesn’t mean anything long. In fact, it is encouraged to have a debt that you can comfortably pay off right away.
The trick is to reduce your huge debts to amounts that don’t hurt your personal finances. For example, credit cards have fairly high interest rates. For this reason, reducing credit card debt will certainly have a beneficial effect on your finances and your credit score as well.
With credit cards, the use of credit is crucial. This is the ratio between the credit you owe on your card and your total credit limit. Experts advise that this ratio should not exceed 30% of your total limit. In fact, borrowers with the highest credit score tend to keep the credit utilization ratio below 10%.
However, as mentioned, do not close your account and do not stop using the credit limit. Maintaining these accounts is also crucial to your credit score, as different scoring algorithms use the length of your credit history when giving you a score.
In general, the older your credit history, the better your chances of a higher score. So if you want a simple strategy on how to get a credit score of 800 or more, try paying off those debts.
2. Use your credit card as a debit card
Now this one seems to be against the rules. However, definitely not if you know how to do it.
First, according to our first tip, avoid using a credit card for purchases you can’t afford, leading to overspending. However, since there are costs you need to incur each month, such as gas, groceries, subscriptions, and utility bills, using a credit card could be beneficial.
But how? Well, these are the costs you usually pay at the end of each month. This means that despite using a credit card throughout the month, the final balance is always low and the card is always active. This alone ensures that issuers do not reduce your credit limit or close your card due to inactivity.
However, one thing needs to be noted! If you have committed to reducing your debt, use a different credit card for your daily purchases. This will help prevent you from maintaining balance.
3. Set up automatic payments
What about automating all debt payments? This is undoubtedly one of the best strategies to increase your credit score to 800.
As we’ve seen over and over again, late payments will always negatively affect your credit score. Not only that, you will have to pay more due to default interest charged.
Setting up automatic payments helps ensure that your payments or installments are paid on time, while avoiding fines or rising interest rates. You need to do this for all your credit card debts, student loans, personal loans, mortgages, etc.
When setting up automatic payments, remember to ensure that they are scheduled on the correct dates. You don’t want to have these unexpected penalty costs or reduced credit score.
Also, when calculating your FICO estimate, your payment history represents approximately 35%. Because of this, the biggest deciding factor is your credit score. Therefore, ensuring that payments are made on time helps keep this record clean and attractive.
Setting up automatic payments also relieves you of the burden of remembering the exact dates for each payment.
4. Clear your credit card balance with each billing cycle
In addition to automatic payments, you must ensure that you do not have a credit card balance at the end of your billing cycle. For example, assuming you used your credit card as a debit card, as suggested earlier, ensure that all debt is settled each month. This means avoiding purchases that could exceed your monthly income.
In fact, there is no silver bullet in achieving a higher credit score. And if you learn how to get a credit score of 800, you need to combine different strategies to get there. Knowing the right mix and understanding how each strategy helps your credit score is therefore very important.
I know seeing all this money being deducted from your account is not easy. However, keep in mind that you have already spent that money and have a similar option next month. And the results on your credit score are also impressive.
More Strategies On How To Achieve A Credit Score Of 800
5. Increase your credit history
As mentioned, various factors determine your credit score. The length of your credit history is one such factor, accounting for 15% of the total rating. This means that achieving this 800 rating is impossible without considering the length of your credit history.
So the only solution is yes build and increase that credit history in time. One of the amazing options to get started is to take out a student loan or a loan to create credit.
You don’t need a credit check for student loans, as most of them are funded federally. This makes it an ideal option for students without a previous credit history.
On the other hand, a loan to create credit acts as a savings account. You get a loan, but you cannot access it until you have paid all the necessary installments to repay the loan. When you are done with the meals, you can now access your money. Even though it is a personal loan, it helps build a frugal culture at the same time, it is increasing its credit history.
Applying for a credit card can also help grow your credit history. And if you don’t qualify for uninsured, you can start with insured and then progress. A secured credit card requires a cash deposit as collateral.
See related: How to save low income money fast.
6. Always review your credit reports and credit rating
One thing you should always do is monitor your credit reports and credit score. You don’t want to do everything right, just find that your efforts are not reflected in your credit score report. A Federal Trade Commission report found that 1 in 5 consumers gets an error in their credit report.
Checking your credit score is easy with a number of free credit rating sites. With some of these sites, you get more than just credit score progress. They give recommendations and tips on how you can increase your credit score.
Typically, your credit score is calculated from your credit reports listed at credit bureaus. Reviewing these reports helps you determine that they are accurate and that the rating agencies are getting the correct information. Inaccurate information, such as a late payment sign, can damage your credit score.
If you want to check your reports for free, you can visit AnnualCreditReport.com.
7. Diversify your borrowing
When calculating your credit score, having one credit line is not good with scoring algorithms. They love diversity! This means they want to see you repay more loans such as car loan, mortgage, credit card, student loan, etc.
By doing so, you demonstrate your solvency, which works in your favor when calculating your credit score. For example, having multiple credit cards can help you cover your monthly expenses while still maintaining a low utilization rate. This would not apply to a single card as you would have to spend above the 30% limit.
However, remember to make payments on time. Although diversity is recommended, it can put a strain on your finances, leading to delays in repayments and debt repayments.
So if you are wondering how to get to 800 credit rating in 45 days or less, you can take you there by following these amazing tips. Overall, loan diversity is one of the most effective strategies.
How long does it take to create a credit score?
Getting a loan is easy if you follow the right strategies. However, it is never immediate.
For new borrowers, it takes about six months before you can even get your first score. But with the strategies mentioned above, you can easily increase your scores and achieve 800 credits or more.
All you need to do is ensure that you have financial discipline and that every financial decision you make is well thought out. To get a more comprehensive overview of how much time you need, you can check out our article how long it takes to obtain credit.
How often is the credit score updated?
Generally, lenders send your credit information to the credit reporting offices on a monthly basis, although some may do so more often. There are others who provide data after at least 45 days.
This information is collected by credit rating agencies such as FICO to adjust your credit rating. This means that when reporting credit bureaus receive information and update a credit report, this is the only time that the FICO or any other credit rating agency can update your credit rating.
Although it may not appear in your weekly reports, a change in your score will appear in at least 45 days.
Advantages of credit rating 800
After working so hard to learn how to get a credit score of 800 and eventually achieve it, how does that help? How do you benefit from a high credit score?
Greater chances of approving a loan
With a credit rating of 800, you only need to meet the requirements of another lender, such as income level and maximum debt balance. Otherwise, the lender will quickly approve your application.
A high credit rating means less risk for the lender. Because of this, they are willing to offer you the best prices available as they are almost certain that you will repay the debt. And at the right time!
Better credit card deals
Learning how to get a credit score of 800 is not in vain. With such a credit rating, even credit card issuers are willing to offer you better interest rates. For example, you qualify for interest-free promotions that allow you to use a credit card for up to 21 months without interest. However, you must be able to repay the entire balance before the end of the promotion.
If you love to travel, you may also enjoy using some amazing travel cards that offer the best discounts and bonuses. However, you must also meet the requirements.
Reduced insurance premiums
Some insurance companies will include your credit rating in their premium calculations. With a higher credit score, you may be able to enjoy lower premiums. This, however, depends on whether your country allows such premium calculations.
How to maintain a credit score of 800
Achieving a credit score of 800 is one thing; maintenance up there is another. But that shouldn’t be a nuisance to you.
Although the credit score may fluctuate slightly, you can keep it above 800. All you have to do is continue with what gave you the high score. Maintain the good financial habits mentioned above and you will be ready.
Now at least you know how to get a credit score of 800.