Achieving an 800 credit score, or even an 850 (perfect credit score) is not impossible. There are a few things that you should know in order to have that level of success. Watch the video below to come with me over my shoulder as I dissect my own credit score. Let’s get to it!
Today’s topic, we’re going to get right into it, it’s a topic that I haven’t covered.
Basically, what we’re going to talk about is, I’m talking to people that have excellent credit.
So, for you guys that are already in that 700, 720, 730, even 750 credit score, and you’re saying, “You know what, I want to take it to the next level. How do I get to the 800s?”
Today, we’re going to talk about a few things that could show you why. I’m going to actually do a screenshot of my personal credit report.
Something simple you guys can follow, like a Credit Karma, and then you’ll be able to see kind of the areas that I need to work on personally, and why my credit score is only at a 760 versus 800.
I’ll also discuss the things that I could do myself, and to kind of show you, if you’re at that level and you want to take it up, what you need to do.
Let’s get right into it.
First thing you need to understand is that, according to TransUnion, there are only less than 20% of people that have over a 780 credit score.
It is not a widespread thing where people have even an 800 credit score. The statistics are very low, so TransUnion says, “Hey, only 20% of America is only at 780 or under.” Obviously, to be an 800, it’s going to be very low.
The key here is just to understand why.
Remember, when you get over that 760 mark anyway, you’re in that excellent credit score range anyway, and you’re not going to make a whole lot more difference in terms of interest rates or more approvals.
But people want to see the 800, so let’s dive right into it.
Here’s my actual credit report. Here’s the screenshot. I want to go over it with you guys so I can show you what you’re looking at.
Right here, you can see that the age is 5.2.
Let’s look at the greens, and then look at the two reds. Again, I’m right around that 760 mark.
The reds are indicating that there’s a little bit of an issue there, and the greens are showing, basically, excellent. Okay? So, let’s go to the reds first. Let’s look at age. That one is showing 5.2 years.
Now, it’s in orange because it means it’s middle-of-the-road. According to Credit Karma … You need to understand this, also.
Basically, your credit report is a snapshot of seven years. Your payment history, and also any of the negative marks, if you ever had them, will show a seven-year snapshot.
That’s how they’re factoring this information.
So, when you look at my age, at 5.2 years, you have to think that it’s not quite what Credit Karma looks for, and based on this screenshot I’m showing you here, you’ll see that seven to eight years is actually where we want to be, in terms of age.
It’s not going to go excellent until we get to that seven, eight-year mark, until it turns green, and then the points will go up from there.
So, older accounts, they’re looking at that seven-year mark as to your average age to get into that green spot. Right now, I’m in the orange.
Longer I make payments on time, obviously, my score goes up and I start … I’m at 5.2, I got to get to seven. A little over a year, I should be there.
The other thing they’re going to look at is, if you look at the other one, it’s actually red, and that is inquiries.
You see here, showing here, that the inquiries are showing at nine. That means that within the last two years, I have gotten nine hard inquiries on my credit report.
That is not good.
But what happens is, when you shop for a vehicle, they put the inquiries on there. It is something that happens. It happens to the best of us.
So, you’ll see nine inquiries there.
What Credit Karma looks for is to have zero. Not even one.
We’re going to cover this topic in a second, but not even one is considered excellent.
If I wanted to get into that one or two areas, it would certainly be green, as you can see here, but when we’re talking about excellent, it would be seven years of perfect payment history and then also, to get this from red on the inquiries over to excellent, I need to be at zero.
Obviously, we know that’s going to be very hard, but it is certainly doable.
Now, remember that hard inquiries stay on your credit report for 24 months, and then after 24 months, on the 25th month, are actually removed automatically.
You don’t have to do anything about it. They’ll just remove.
You have to also know that missed payments … For you guys, you’re already at the … If you’re already in the sevens and you’re trying to get to eight, I’m assuming there’s probably not going to be any missed payments.
So, this is going to be the factor that I want to focus on the most because think about it this way. 35%.
You will literally take yourself from the sevens to the fives if you miss a single payment. That is the biggest contributor to your credit score, is going to be your payment history.
So, making sure that … If you have to put stuff on automatic pay if you have to take your cell phone bill and your credit cards and things that come out every single month, and you put them on auto-pay so you do not damage your credit by missing a payment …
I get things happen, and I get there are hardships, but anything you can do to make, at very minimum, the minimum payment will save you, because 35% could crush your entire legacy and your empire that you’ve built to get it into the sevens already.
For me to get from 760, where I’m at, all the way up to that 800 mark, I’ve got to get those inquiries low, and I’ve got to get my age up to above seven years.
That’s how they consider it.
More scoring models than just Credit Karma
Now, there are different factors and scoring models. This is just Credit Karma, but I venture that I would be … If I were to look at it, I’d say, I would probably be in the eights.
In fact, I did do some … They have a simulation thing. It has me at 803 if both of those factors are in green.
You’re going to ask me this question because if you got anything out of this video, you’re going to know that it’s a waiting game.
It doesn’t happen overnight, you don’t just get an 800 credit score by having one or two accounts that are a couple of years old. It is a waiting game.
Making payments every single month on time.
Unfortunately, we can’t just get an 800 credit score in two years. In fact, an 850 credit score, which is the best that FICO says is the actual best score, so they’re saying that you have to be a minimum of 45 years old and have started at 18 years old just to be able to obtain the perfect 850 credit score.
Getting to 800 is hard. It is not impossible, but you got to follow these steps.
800 credit score or more is a waiting game.
Now, when I say a waiting game, it just means being consistent every single month and making your payments on time, keeping your inquiries low, and making sure that you have revolving accounts.
There are a few things, also, that you have to have.
When you’re looking at my report, you’ll see that I have over 37 accounts, and they are looking at … About 10% of that is going to be the mixture.
So, you got revolving, which is typically the credit cards. Then, you also are going to need an installment.
If you guys don’t have any installment accounts, you’re going to want a car, that’s going to be a car. Fixed payments each month.
Car payments, home payments. You’re going to want real estate on there, as well. Those three categories are very, very important.
You got real estate, you’ve got revolving and installment. So, a loan or a car payment would be installment.
Revolving is going to be … The most common is going to be your credit cards, and then real estate, obviously, is your mortgage payment.
Those are the mixture that it counts for 10% of your credit score, and mine shows green there because I’ve got that mixture.
You’re asking me this question. “37 accounts?”
I know this is the question right here. “37 accounts? Mike, that’s ass-backward.
I don’t understand how 37 accounts … Because if you have 37 accounts, that means you’re going to have a lot of inquiries, right?”
And you would think that the fewer accounts that you have, actually the better. But it’s not.
It’s actually the more accounts. But then, you say, “You’re going to have a bunch of inquiries on your credit report. If you’re adding more accounts, aren’t you adding more inquiries?” Right?
That would make sense, and you would say that, obviously, if I’m adding more accounts, I’m adding more inquiries, my score would actually drop. And that is true.
My 800 credit score tip
What you want to try to do … I’m going to give you this little tip, is to get opted in.
I did a video on this. If you go back to any of my videos, you’ll be able to see an opt-in, opt-out.
That puts you in public record. Why that’s important is because, what’s going to happen is, they’re going to start sending you credit card offers in the mail.
Those, they already have done the soft pull on it, and a lot of times, these credit card companies will not actually charge you in inquiry if you do it within their window.
So, you’ll get a credit card thing that says Capital One in the mail, “You’ve been pre-approved.”
It doesn’t necessarily mean they’re not going to pull a hard inquiry, but a lot of them will not if you’re going through the pre-approval and putting in the code when you call.
It will not even cost you an inquiry.
You can add to your accounts, but not to your inquiries. I want to make sure you guys know that. If you have to go back to my video, it is the opt-in, opt-out video. There are instructions on how to do it. It’s very, very clear.
But again, if you got anything out of this video, and you guys have … If I missed anything, post to comments below, give me a thumbs up if I’ve helped you in any way, shape, or form.
But if you guys are in the 700, 720, even the 750, and looking to take it to the next level, you’ve got anything out of this video, it is a waiting game, and you have to be patient.
Make sure you opt-in, and let’s start getting some more credit cards and more accounts on your file.