While achieving a perfect 850 credit score is rare, it's not impossible. About 1.3% of consumers have one, according to Experian's latest data.
FICO scores can range anywhere from 300 to 850. The average score was 714, as of 2021.
The few people who do manage to achieve perfect credit scores tend to share three key traits, according to Experian's latest analysis.
People with perfect scores are typically older
"You're not likely to see many 25-year-olds with a perfect credit score," Matt Schulz, chief credit analyst for LendingTree, tells CNBC Make It.
The majority of people with 850 credit scores are above the age of 57, according to Experian's report. About 70% of people with perfect credit scores are baby boomers (defined by Experian as people age 57 to 75) and members of the silent generation (ages 75 and above).
Generation X (ages 41 to 56) account for about 22% of people with perfect scores. Meanwhile, only about 4% of that group are millennials and Gen Zers (ages 40 and under).
Since lenders want to see that you've demonstrated a consistent ability to handle credit well over a long period of time, length of credit history has a big impact on your credit score. This is why older generations, who have had a longer time to build credit, tend to have higher scores than younger ones.
They have more credit cards but lower balances
Opening a bunch of new credit cards won't increase your odds of achieving a perfect credit score, but people with 850 credit scores tend to have nearly six cards on average, according to Experian. That's above the national average of about four credit cards per person.
The key to perfect scorers' success: Although they have more credit cards than average, they tend to have lower balances, according to the analysis.
People with 850 credit scores tend to carry about $2,588 in credit card debt, compared to the national average of $5,221.
And people with high credit scores aren't maxing out their cards. Personal finance experts typically recommend that you only use about 30% of your available credit. People with scores above 800 tend to use only about 7%, according to creditcards.com.
They have less debt in general
People with an 850 credit score tend to have less debt in other categories, Experian's report reveals.
For example, they typically have an auto loan balance of about $17,000 compared to the national average of nearly $21,000. Perfect scorers also carry below-average balances on auto loans and mortgages.
That doesn't hold true for every type of loan: People with an 850 credit score carry an average balance on personal loans that's nearly double than the national average.
However, the average interest rate for a personal loan is around 8.73%, compared to the average credit card interest rate, which is around 16.65%, according to the Federal Reserve's latest data.
Overall, people with an 850 score demonstrate their creditworthiness to lenders by persistently paying down different types of debt.
A near-perfect credit score is good enough
Although having a perfect 850 credit score may earn you bragging rights, it doesn't come with many additional benefits. Anything above 800 is an exceptional credit score, according to FICO's website.
"The reality is that you're not going to get anything with an 850 credit score than you wouldn't be able to get with an 830 credit score, or really even a 780 or 790 credit score," says Schulz.
To qualify for the best terms when applying for a loan, the cutoff is usually between 740 and 760, Ted Rossman, senior industry analyst at Bankrate.com, tells CNBC Make It.
But if your credit score is below 740, then every point counts.
"Lenders often have sharp cutoffs, perhaps 20-point bands such as 720-739, 700-719, 680-699, etc. The lower your tier, the less likely you are to be approved, and the higher your interest rate will be," Rossman says.
How to improve your credit score
Credit experts agree that the best way to improve your credit score is to reduce your debt, which is easier said than done.
If you have different types of debt to tackle, focus on reducing your credit card balance. Doing so can lower your credit utilization ratio, which is a major component that credit bureaus use in calculating your score.
For instance, say your credit card limit is $8,000 and your balance is $4,000. If you reduce your balance to $2,400, you're now only utilizing about 30% of your credit, compared to 50%.
Additionally, you can request a higher credit limit from your credit card issuer to improve your utilization rate.
For example, if you owe $2,000 and have a $5,000 credit limit, your utilization rate is a higher-than-optimal 40%. However, if you request that your credit limit be increased to $8,000, with the same balance, your credit utilization rate falls to a more-acceptable 25%, Schulz explains.
People tend to overthink the credit scores but it's actually pretty simple, Schulz says. To improve and maintain a good score, consistently pay your bills on time, keep your balances as low as possible, and don't apply for too much credit too often.
"If you do those three things over and over for years, your credit is going to be just fine," he says.
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