When it comes time to make significant financial decisions, your credit score will heavily influence your approval odds, terms and rates. The simplest way to increase your chances of credit approval at favorable rates is to aim for an 800 credit score.
While an 800 score isn’t perfect, it places you in the excellent credit range, the highest tier based on the two main credit scoring systems (FICO and VantageScore). Achieving an excellent credit score not only unlocks a world of benefits and advantages, but you’ll join an exclusive few who are a part of the “800 credit score club.”
Experian, one of the three main credit bureaus, reports that only 21% of U.S. consumers have an 800 credit score or higher. Being a part of this club shows lenders that you’re a trustworthy borrower with a considerably higher score than the average consumer credit score of 714.
If you’re on the cusp of the excellent credit range, this guide will help you understand what it means to have a credit score of 800 or higher, ways to achieve an excellent credit score and the benefits of this type of score.
What It Means To Have An 800 Credit Score Or Higher
Credit scores generally range from 300 to 850. The table below shows the breakdown of credit standings and the associated score ranges.
| Standing | Range |
|---|---|
| Poor | 300-579 |
| Fair | 580-669 |
| Good | 670-739 |
| Very Good | 740-799 |
| Excellent | 800-850 |
An 800 or higher credit score generally indicates to lenders that you’re the ideal credit consumer. Individuals who fall in the excellent category tend to have an exceptional credit history, including no missed payments, a low credit utilization ratio and a healthy mix of credit accounts.
While an 800+ credit score can increase your approval odds at favorable rates, it does not mean you’re guaranteed to get approved on loans and credit products or even receive the best rates available.
When reviewing your credit application, lenders consider other factors and metrics such as your income, debt, employment history and debt-to-income ratio (DTI). However, since you have a credit score of 800 or higher, the odds of you getting denied a line of credit decreases dramatically.
An 800+ credit score shows lenders that you tend to have good credit habits, and you’re likely to pay back the funds according to the guidelines outlined in the contract.
Perks Of Having An 800 Credit Score
Achieving an 800+ credit score comes with its perks. You’ll receive many of the same benefits of a ‘very good’ credit standing, but the advantages may be slightly better. Let’s delve into some of the benefits of maintaining a credit score over 800.
- Increased approval odds: No matter the type of credit you’re applying for (mortgage, auto loan, credit card or a personal loan), an 800 credit score generally surpasses the lender’s minimum credit score requirements. If you meet the other criteria, your approval odds are phenomenal.
- Favorable terms and rates: Since you’ve proven that you can manage your credit well, you may receive a line of credit at the lowest interest rate available. Favorable interest rates can save you hundreds or thousands of dollars in interest payments.
- Best credit offers: Individual consumers who have an 800 credit score tend to increase their odds of getting approved for the best credit cards. Some cards may specifically be reserved for those a part of the ‘800 club.’
- Opportunity to receive more purchasing power: With an 800 credit score, lenders are more likely to increase your credit limit, which allows you to improve your spending power. You’ll be better equipped to maintain a low credit utilization ratio with the increased limit.
- Better insurance premiums: Many states, including Arizona, allow insurance providers to factor in your credit score when calculating your insurance rate. An 800 credit score may help in reducing your overall insurance costs.
How To Get An 800 Credit Score
Obtaining an 800 credit score may not be as challenging as you think. Depending on your current score, it may take some time, but implementing the following strategies can improve your credit score and you can make your way to the ‘800 club.’
Ensure you’re making full, on-time payments
The two main credit scoring models—FICO and VantageScore consider payment history the most influential factor during your credit score calculation.
Since payment history makes up more than a third of your score’s calculation, the easiest way to show lenders your creditworthiness is by paying your bills on time, every time.
If you fail to miss a payment, you may have 30 days to correct the issue. Generally speaking, lenders don’t report late payments to the credit bureaus until the payment is 30 days past due.
Maintain a low credit utilization ratio
Credit utilization is a subset of the amount owed category, and it’s the second most important factor in determining your credit score. Credit utilization refers to the amount of credit you’ve used compared to your total credit limit. For example, if you have a $3,000 balance on a credit card with a $12,000 limit, your credit utilization ratio would be 25%.
Credit utilization is calculated by each credit card, then collectively for all your credit card accounts.
A good rule of thumb to avoid damaging your credit is maintaining a monthly utilization ratio under 30%. Experian reports that consumers with at least an 800 credit score have an average credit utilization rate of 11.5%.
Diversify your credit portfolio
If you’re nearing an excellent credit standing, but your score has remained stagnant for a few months, you may want to consider diversifying your credit portfolio. While credit mix only accounts for 10% of your score calculation, it may help give you the extra boost you need.
Credit mix can offer lenders a glimpse into how you manage multiple types of credit simultaneously. The two main types of credit accounts are revolving credit and installment credit. Revolving credit accounts consist of credit cards, lines of credit and retail cards. Installment accounts include mortgages, student loans and auto loans.
If your credit portfolio consists mainly of installment accounts, you may want to consider adding a revolving account like a credit card. Adding to your credit limit can help with your credit utilization ratio.
Be aware of your credit history
The age of your credit history accounts for 15% of your credit score calculation. Generally, the longer you’ve managed credit, the higher your score will be. FICO and VantageScore may look at the age of your oldest account, the latest account and the average of all your accounts. If you have a credit card that you don’t use anymore, you may want to consider the effects on your credit score before closing that account. That’s because closing an account can reduce the overall length of your credit history.
Check your credit report regularly
It’s always good to check your credit report at least once a year. It’s not uncommon for errors to show up on your credit report. In fact, 34% of Americans found at least one error on their credit report, according to a recent Consumer Reports investigation.
According to the FTC, Americans are legally entitled to receive a free copy of their credit report once every 12 months. For Arizona Central Credit Union members, you can receive your free comprehensive credit report through our SavvyMoney tool.
If you’ve reviewed your credit report and noticed an error, you should immediately contact one of the three credit bureaus.
Learn More About Credit Scores
So, is 800 a good credit score? Yes, it is an excellent score that can unlock numerous benefits. These include increasing your approval odds at favorable terms and rates, increasing your purchasing power, snagging the best credit cards, etc. The difference between an 800 and a perfect credit score is not noticeable. However, you should try to strive for the best score possible.
Want to learn more about credit scores? Here are some of our recent blogs discussing various aspects of establishing and building credit.
- How Your Credit Score is Determined: The Main Deciding Factors: This post delves into the most important factors that determine your credit score.
- How to Build Up Your Credit from Scratch: This article provides actionable tips you can take to build your credit from the ground up.
- How to Improve Your Credit Score: Top Five Strategies: Learn how to take care of and raise your credit score. Also, find out the contributing factors that go into the credit score calculation.
- 7 Reasons Your Credit Score Suddenly Dropped: Credit scores often fluctuate. Leaving you curious as to why it lowered. Discover the common reasons why your credit score suddenly dropped.
- How to Read a Credit Report: Learning to read your credit report is an important step in understanding and improving your credit. Discover what’s included and excluded from a credit report.
