How Good Is a Credit Score of 820?

FT Contributor
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According to Experian’s official classification, a credit score of 820 is Exceptional and is in the highest tier possible for ranking credit scores. A person with an 820 credit score likely has established excellent credit habits and knows how to monitor their credit score. Experian’s official credit score categories are:

  • 300 to 579: Very Poor;
  • 580 to 669: Fair;
  • 670 to 739: Good;
  • 740 to 799: Very Good;  
  • 800 to 850: Exceptional.

Having a credit score of 820 means that you’ve created decades of good credit habits. This article will detail what a person with an 820 credit score has done correctly and what they need to continue doing to maintain their score.

Table of Contents

Why Your Credit Score Is 820

Only 21% of consumers in the United States have credit scores that fall within the Exceptional range. Most of them are likely to keep a Very Good or Exceptional score for the rest of their credit history as long as they maintain good credit practices. Here are three things you’ve been doing if you have an 820 credit score.  

Making Payments on Time  

Less than 1% of people with 820 credit scores have late payments listed on their credit history. Late payments can affect over 35% of a credit score and are among the biggest reasons why some people struggle to make a Good credit score Exceptional.

However, if your credit score is 820, you’ve been able to pay almost every debt on time without hassle.  

To maintain a high credit score, continue to make payments on time. If you’re accidentally late by one day, don’t panic. Most credit agencies won’t send late information until you’re 30 days late, especially if you’ve established trust with your lenders by paying before the deadline.

Maintaining Low Utilization

Your credit utilization rate can affect over 30% of your credit score. With a credit score of 820, your credit utilization rate is most likely under 30%. Credit utilization refers to the percentage of credit used on an account. If a person has a credit limit of $2,000 and makes a $1,000 purchase, they are utilizing 50% of their credit.  

Credit experts recommend utilizing less than 30% of your total credit limit to maximize your credit score. Low utilization builds trust with lenders, who then consistently report positive marks to credit bureaus.

Creating Long Credit History

Long or short credit history affects 15% of your credit score. If your account is new, you’re unlikely to have a very high credit score. Once your account has built up more than seven years of credit history, your score will improve.  

With a credit score of 820, your accounts likely have long histories. Borrowers who are over 60 years old are more likely to have Exceptional credit scores because their accounts have been open for decades, while those in their early twenties are more likely to have Good or Fair credit scores.

What Can You Do With an 820 Credit Score?

Those with 820 credit scores have the best rates, the best rewards credit cards, and the best loans. They are in the highest tier for credit rates, meaning that there’s not much more a lender can expect from them. Those with 820 credit scores have spent years refining and perfecting their score and have earned their rewards.  

Rewards Credit Card 

Lenders want to work with anyone with a credit score higher than 800. With a score of 820, you qualify for the best rewards cards, including cards that offer immediate cash when you sign up.

Airline Credit Card 

Airline credit cards often won’t accept anyone with a credit score lower than 700. With an 820 credit score, you will qualify for your choice of airline credit cards. These credit cards come with myriad travel benefits.

Low mortgage Rate 

With an 820 credit score, you qualify for the best mortgage rates. Most of the time you can get a mortgage rate that is 1.5% lower than borrowers with Fair credit. Working your way towards an 820 credit score saves thousands of dollars in interest rates.

Low Personal Loan Rate 

Personal loan rates for bad credit can run as high as 35%, while a person with an 820 credit score will pay as little as 7%. Having an Exceptional credit score qualifies you for the best personal loan rates available, and any lender will be happy for your business.

Auto Loan With 0% Interest 

Auto loans with 0% interest are only offered to those with Exceptional credit, and an 820 credit score qualifies. This means your monthly auto payments go directly towards financing your vehicle with no interest.

How to Improve an 820 Credit Score 

Increasing an 820 credit score to 850 (the maximum credit score) won’t change your loan options. Lenders see scores above 820 as relatively the same score and don’t break down mortgage and loan rates further.

However, if you want to increase your 820 credit score to 850 to allow for more breathing room within the Exceptional credit range, here’s how you can do it.

Continue to Pay on Time

You’ve already established a history of amazing credit by paying your bills on time and never missing a payment. To increase your credit score from 820 to 850, continue to pay on time. This might seem like an obvious answer, but missing a payment can drop your score into the Very Good range if you’re not careful.

Avoid Closing Old Accounts

One of the reasons why your credit score is 820 is because you have multiple credit lines open. Most people with 820 credit scores have around three credit cards and two store cards.

Closing a credit card account will take some of your available credit away from your account, increasing your utilization rate and dropping your score. Over time, closed accounts will stop affecting your score.

Don’t Apply for New Credit

If you have three credit cards that you opened 20 years ago, your average credit age is 20 years. However, if you open a brand new account, your credit history adjusts to reflect the new average of about 15 years.

If you’re trying to increase your credit score from 820 to 850, even the smallest change on your account can stall your progress. It’s important to note that applying for new credit won’t severely affect your current credit score — it will just stall your progress moving forward.

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