How Good Is a Credit Score of 850?

Jaron Pak

If you have a credit score of 850, congratulations, you have a perfect credit score.

Your score is in the “Exceptional” credit range. This is the top-tier credit category for the FICO and VantageScore scoring models, respectively.

Having a credit score of 850 is a very rare achievement. As of 2019, 1.2% of the American population had a credit score this immaculate.

If you want to maintain your score at these lofty heights, it’s essential that you put in a herculean effort to do so. Start by analyzing what factors got you to a perfect score. Then use that information to bolster and occasionally tailor your existing financial plan in order to perpetuate your success.

Table of Contents

Why Your Credit Score Is 850

Your credit score comes from an amalgam of your good and bad financial activity. In the case of a score of 850, this will be primarily — if not exclusively — good behavior.

Even while you’re basking in the pinnacle of success, it’s still important to consider the factors that got you here. Like an athlete attempting to win a second championship, you need to study the victories of the past to succeed in the future.

Here are several of the most important factors that go into your credit score. Review each one and consider how it has uniquely impacted your perfect score.

Payment History

Perfect payment history can do wonders in boosting your credit. With a perfect score, this means you haven’t missed a payment and are the model of consistency and responsibility when it comes to paying back lenders on time and in full.

Credit Mix

If you have one or two lines of credit, it can limit your score. On the flip side, if you have many lines of credit and mishandle them, it can also hurt your score. A perfect score shows that you have managed to tackle everything from car and student loans to a mortgage, credit cards, and any other form of personal credit.

Credit Age

It’s nearly impossible for a young person to get a perfect credit score. This is because the older your credit is, the higher your score can go. If you have perfect credit, your average credit age is probably pretty old.

Remember, though, this takes into account the average age of your credit lines. So, if you open up several new loans at once, this will reduce your average credit age and lower your score.

Credit Utilization Ratio

The amount of your available credit that you are currently using is also a factor. If you keep your credit utilization ratio under 30%, it can help you maintain a perfect score.

Total Debt

Large piles of debt can be intimidating to a potential lender. Those with perfect credit have shown that they can utilize credit consistently while not allowing their non-revolving credit to accumulate to an unreasonable level.

Derogatory Marks and Hard Inquiries

A derogatory mark can show up on your report if you fail to come through on a financial obligation. This may come from default accounts, bankruptcies, foreclosures, and even a missed payment.

With a score of 850, your account won’t have any negative marks like these. However, it’s important to keep them all in mind so that you can avoid them in the future, as well.

In addition, while not considered a derogatory mark, hard inquiries can temporarily drag down your score — for as much as a year. This takes place whenever a lender reviews your credit to give you a loan and is often an unavoidable, though temporary, necessity.

What Can You Do With an 850 Credit Score?

As already mentioned, a perfect score puts you in the highest tier on both credit score models. With the FICO model, this tier spans from 800 to 850, and with the VantageScore model, it stretches all the way from 781 to 850.

All that to say, while your perfect score is fun to tout in front of friends and family, at the end of the day, in most cases you’ll have access to the same benefits as anyone with a top-notch score. These include things like:

  • Easy loan approval: Any lender that sees a score of 850 is going to do their best to lock you in as a client.
  • Lower interest rates: Along with easy approval, any money that you borrow will come at the lowest interest rate that you can reasonably hope for.
  • Minimal security deposits: With a perfect score as your testimony, lenders will be quick to minimize the safeguard of a security deposit when setting up utilities or getting an apartment.
  • Higher limits and better rewards: When applying for credit cards, you won’t just be approved. You’ll also likely get the highest borrowing limits and the best available perks and rewards.

If you have a credit score of 850, the financial world is literally your oyster. You can tap into every benefit and reward and expect the red carpet treatment in most scenarios.

However, it’s important to remember that credit scores fluctuate. At 850, your score can only go down at this point. This is why it’s important to make a plan to keep your score as high as possible going forward.

How to Maintain an 850 Credit Score

If you want to keep a perfect credit score in your back pocket, it’s important that you put in the effort to maintain it. This should include things like:

Checking Your Credit Report Every Year

Get your free annual copy of your credit report and review it for potential errors or derogatory marks that could damage your score. These should be addressed with either dispute or goodwill letters, respectively.

Locking in Good Habits

As you review the elements that make up your credit score, look for the activities that you’re already doing to help your credit. Then codify these into a financial plan that can help you maintain your score.

Constantly Seek Improvement

Along with existing activities, look for other positive financial habits such as paying off your credit cards each month or staying physically fit and healthy. These can quietly and effectively help to keep your score elevated.

Get Used to Fluctuations

Finally, remember that credit scores really do fluctuate, and your score will dip below 850 at times. Even perfectly good things like a hard inquiry can temporarily lower your score. The important thing is that you do your best to keep it bouncing right back up to the top of the heap whenever you can.

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