What is the highest credit rating and what are the best ways to improve it?
Are you still wondering what is the best credit score? When you went to school, you received an assessment report to let your parents know how well you did. Well, a credit score is a financial report card to inform banks and lenders how well you are doing.
The highest credit score for a particular credit score model is usually around 850, and if you’ve ever reached this mark, even for a moment, count yourself as a rare financial being.
Is it even possible to reach this level of creditworthiness perfection? Yes, some have done so.2 Is it worth achieving the highest credit value? Probably not.
What is a credit rating?
It is a number that credit reference agencies use to measure how creditworthy a lender can find you. It is based on a number of factors, including your credit history and whether you are on the electoral roll. Your score may go up or down depending on your circumstances.
Why your credit value matters
Lenders and other financial institutions use credit points to get a snapshot of your overall credit health. Although they will usually consider more than just your credit score in a lending decision, the three-digit number is an important factor as it gives them a quick understanding of how likely you are to repay your debts on time.
Some car and homeowners insurance companies also use what is known as a credit-based insurance score to determine your monthly rates, although this is not allowed in every state.
Most credit rating systems use a scale ranging from 300 to 850. However, there are some credit rating models that go up to 900 or 950, including industry-specific scores used by some institutions.
Working your way up to 850 points may sound appealing, but it’s not necessary. Just having a credit score in the upper 700s or low 800s indicates that you are a responsible credit user and you will likely qualify for the same terms as you would with a perfect credit score.
So instead of shooting for a specific score, focus on the credit score areas. Here are the intervals for one of the most common point models FICO ® Grade * :
FICO ® Points Interval
Credit score range
How to get the highest credit score
If you want to improve your credit score to buy a home or just beat your friend’s score, all you have to do is follow these three simple steps, let time do its thing, and you will succeed.
Get your score
How can you improve your score if you do not know what it is? It’s like losing weight when you do not know how much you weigh – how do you know if you’re making any progress?
If you have no idea what your credit rating is, use a site like Credit Karma, Credit Sesame, or Mint to get a free, simulated score. It will not be 100% accurate – but then no credit score can be 100% accurate, as credit scores vary from lender to lender. But it will be in the ballpark and a good place to start.
This is the first step. Once you have found out your score, you can determine if it even needs to be improved. Hopefully, if your score is over 751, you do not need to do much but continue what you are already doing.
Set up automatic payment of invoices
This is without a doubt the most crucial mistake people make. If you do not pay your bills on time, it will affect your score in a very big way. I know we’re all human and not all of us are perfect, but there are ways to protect you from … well, yourself.
Even if you are the best and most punctual counter-payer, you never know what might happen in the future. That’s why it’s a good idea to do all your calculations automatically.
I suggest that you set up automatic bill payments with your checking account to automatically pay at least the minimum payments on all your bills. By doing this, you will never miss a payment. And do not worry if you accidentally pay too much, because you can get your money back on request.