Maintaining an excellent credit score might seem almost impossible, but by using credit wisely, paying your bills on time and keeping the right balance between your debt and available credit, you can attain the best scores.
An excellent credit score varies according to the scoring system used. Credit scores range from a low of 300 to a high of 850. The most popular credit score indicators are the FICO Score and the VantageScore.
The VantageScore is a little more forgiving than the FICO Score, offering a broader range for “excellent” and a smaller range for scores on the lower end. VantageScore follows these ranges:
- 750-850: Excellent
- 700-749: Good
- 650-699: Fair
- 550-649: Poor
- 300-549: Very poor
The FICO Score is the score lenders use most. The scoring range is as follows:
- 800-850: Excellent
- 740-799: Very good
- 670-739: Good
- 580-669: Fair
- 300-579: Very poor
How to attain the best credit score
There are things you can do to reach a high credit score:
- Pay bills on time. One of the biggest factors in determining your credit score is your payment history. Letting a bill fall behind 30 days or more will quickly lower your credit score.
- Keep a good debt-to-credit ratio. Having a high credit limit is an opportunity to elevate your score, but you should use no more than 30 percent of the credit limit. Maxing out your credit cards will hurt your score. A debt-to-credit ratio no higher than 30 percent is best. Also, avoid credit cards with small credit limits. It’s hard to maintain a good level of available credit with a low-limit card, which hurts your credit score.
- Don’t close out older credit cards. If you do pay off a credit card, keep it open, especially older cards. Older credit cards can show your long credit history. People with the best credit scores average 11 years of credit history, while those on the lower end average seven years of credit history.
- Keep applications for credit to a minimum. Too many hard inquiries into your credit history hurt your score. Keep hard inquiries to no more than two every 24 months. Inquiries stemming from a home or auto loan count as one inquiry if they are all made within 45 days.