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What Is The Highest Credit Score You Can Have?

Hanna Kielar8-minute read
December 21, 2021

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With the FICO® credit model, the highest credit score you can achieve is 850. Any score above 740 is considered “excellent” and will get you the best interest rates on mortgages, credit cards and car loans.

There isn’t one specific number you need to hit in order to have an excellent credit score. Instead, your credit score will fall within one of five different credit ranges: poor, fair, good, very good and excellent. FICO® (Fair Isaac Corp.) and VantageScore® are the two primary credit-scoring models.

These ranges do vary slightly depending on the credit bureau calculating your score. Here’s how the three major credit institutions define an excellent credit score:

Credit Bureau

Excellent Score

TransUnion®

781 – 850

Equifax®

760 – 850

Experian™

750 – 850

 

 

Learn more about how FICO® and VantageScore® determine what a good credit score is.

Why Is Having A High Credit Score Important?

While it’s certainly not necessary to have an 850 score, it’s important to maintain a high credit score. This will make it easier for you to buy a home, purchase a car and even get a job.

When evaluating your credit score, you’ll see your history of repaying debts and making monthly payments. If you have an excellent or even a perfect credit score, the lender presumes you’re not a risky investment because they assume that you’ll treat new credit as you always have and will pay it back responsibly.

If your credit history shows that you don’t pay your bills on time, some lenders may be hesitant to extend you a line of credit. They may be more concerned that this pattern will repeat itself, and that they’ll be out that money.

What Factors Determine Your Credit Score?

There are a number of different factors that can influence or help improve your credit score, but the following three items are the main factors you should keep in mind.

Credit History

Your length of credit history accounts for 15% of your FICO® Score. That’s because a longer credit history provides lenders with more insight into your financial habits.

When considering your credit history, FICO® models consider the age of your oldest account and the average age of your combined accounts.

Credit Utilization

Credit utilization accounts for 30% of your FICO® Score. Your credit utilization ratio is a measure of the credit you’re currently using divided by the total amount borrowed.

For instance, if you have $1,000 in available credit and have spent $500, then your credit utilization rate is 50%. Ideally, you should keep your credit utilization rate below 30%.

If you want an excellent score, you should aim to have a much lower credit utilization rate. According to FICO®, those with an 850 score tend to keep their credit utilization rate as low as 4%.

Accumulated Debt

It’s a good idea to have a diverse credit history. Your credit history includes what’s known as a credit mix, and it accounts for 10% of your total credit score.

Having a healthy mix of revolving liabilities and loan products shows that you can manage a variety of different debts at the same time. Revolving debt includes credit cards while loan products can be your mortgage, car or student loan payments.

How To Get A Higher Credit Score

If your credit score is lower than you’d like, there are steps you can take to build your credit. As you can see, achieving a high credit score isn’t arbitrary. There’s a formula you can follow to raise your credit score.

However, depending on your age and credit history, it may be challenging for you to reach a perfect credit score of 850. It’s possible, but you’ll need to have a very low credit utilization rate and a robust credit history.

But achieving a credit score of 740 or higher is entirely possible. Listed below are several financial habits that can help you achieve this.

Practice Financial Responsibility

The best way to achieve an excellent credit score is by practicing financial responsibility in your personal spending. You can do this by creating a realistic budget every month and eliminating all nonessential expenses.

When you practice responsible spending, you’re building a strong financial foundation. This foundation will equip you to make better decisions when it comes to borrowing and repaying your debt.

Make Consistent, On-Time Payments

Many people underestimate the importance of making their loan payments on time every month. Your payment history accounts for 35% of your total credit score, so don’t make the mistake of neglecting this area.

Your creditors will report your payment activity to the credit bureaus every 30 days. While a single missed payment is unlikely to hurt your credit, multiple late payments will cause your score to take a hit.

Other monthly payments, like your gas or water bill, won’t hurt your credit unless the company sends you to a collection agency. It’s a good practice to pay those on time, anyway.

It might also be helpful to set up automatic payments online to ensure you never miss a payment. This can be especially beneficial if you’re out of town and don’t see a statement come through, or accidentally pull out a card you rarely use to charge a meal and then forget to pay it at the end of the month.

Monitor Your Credit Reports

Because your credit score is constantly being updated, it’s important to monitor your report regularly. Doing so will help ensure that all the information on your credit report is accurate. If there are errors, you can find out about them and have them removed in a timely manner before they do any damage to your credit score.

Don’t Needlessly Cancel Credit Cards

Since credit history is an important metric, in most cases you won’t want to close a credit card, even if you don’t use it regularly. That’s because holding a credit card for a long time can have a positive effect on your credit score. If the credit card issuer encourages you to use it occasionally, consider charging it with smaller expenses or set it up as the card where you have a small subscription automatically billed. Just don’t forget to make your payments.

Keep Your Credit Utilization Low

Maintaining a low credit utilization ratio means you don’t want to run up your cards, even if you intend to pay them off at the end of the month. Instead, you might ask the credit issuer to increase your credit limit, or you could apply for a new credit card altogether. Pay attention to how you allocate your monthly spending on a new card to ensure that you are spreading your expenses out evenly.

You’re entitled to receive one free copy of your credit report from Experian™, Equifax® and TransUnion® every 12 months. You can order a copy of your report online at AnnualCreditReport.com.

For ongoing monitoring of your credit, you can check your VantageScore® at Rocket Homes℠.

Benefits Of High Credit Scores

The main benefit of having a high credit score is the ability to take out a loan. But, that’s not all you get by avoiding bad credit. Here are some other benefits of achieving and maintaining a higher score.

  • Lower interest rates: With a higher credit score, you’ll have a better chance of securing the best interest rates on a loan, saving you money in the long run. This could apply to a personal loan, student loan or your mortgage.
  • Better car insurance rates: Your insurance provider is going to look at how responsibly you handle your personal finances, and make some assumptions about other areas of your life, such as driving. This is the “halo effect” at work, as your good behavior with your finances can help you look like a better risk in all other areas, including insurance.
  • Waived security deposits: If you’re opening new accounts with a utility or a cell phone provider, they may ask you to make a security deposit to provide them some protection in case you don’t pay your bills on time – or at all. The good news is that a great credit score can help you skip the security deposit, keeping those dollars in your wallet.
  • Credit card rewards: Do you want the best credit cards with longer payment cycles or more perks? The better your credit score, the more apt credit bureaus are to upgrade you to a more attractive product, such as a credit card that can earn you cash back, airline miles and other benefits.
  • Bargaining power: With a better credit score, you’re also more likely to get favorable treatment should something go awry. For example, if you need to skip a card payment or if you’ve sent a payment late by mistake, your card issuer may waive any late fees. Major credit card issuers also might be more inclined to raise your limit if you have a big-ticket purchase coming up or want a little more wiggle room on your monthly bills.
  • Employment: Many workplaces are increasingly looking to hire employees with high credit scores. That’s because a good credit score demonstrates a history of financial responsibility.

How Many People Have Perfect Credit Scores?

Now that you know what a perfect credit score is, you may be wondering how many people have actually achieved this feat.

FICO® credit scores range from 300 – 850. According to data from FICO®, about 1.6% of the U.S. population has a credit score of 850. This figure is up from 0.98% in April 2014 and 0.85% in April 2009.

For many people, reaching an 850 credit score can seem like a daunting task. However, when you look at the lifestyle and financial habits of those who have an 850 credit score, you’ll notice many commonalities.

This starts with where consumers live, as you’ll see in the chart below. The following five states contain the highest number of individuals with an 850 credit score:

 

State

Percentage

Hawaii

2.62%

Connecticut

2.30%

New Jersey

2.27%

Minnesota

2.24%

Maine

2.21%

 

People with an 850 credit score share several other traits as well. For instance, most tend to live in large metropolitan areas. Most consumers also report living healthier lifestyles and having achieved higher levels of education.

Financial Practices Of People With The Highest Credit Score

Of course, achieving the highest credit score isn’t a matter of living in the right place – it takes financial discipline. Here are the financial practices of those who have an 850 credit score:

  • They don’t have a history of missed payments, collections or derogatory marks on their credit report.
  • Excluding their mortgage, the average total credit balance is $13,000.
  • The average credit utilization rate is 4.1%.
  • These individuals have a very established credit history.
  • They regularly seek out new credit opportunities; 10% have made at least one new credit inquiry in the past year.

Is It Necessary To Have The Highest Credit Score Possible?

Fortunately, it’s not essential to have the highest credit score. It’s a great goal to aim for, but it’s also pretty uncommon. It takes a lot of credit history to reach an 850 score.

Of the individuals surveyed by FICO®, the average age of their oldest account was 30 years old. That means it’s generally more difficult for young adults to achieve a perfect credit score, merely because they don’t have time on their side. Age can play a significant role in one’s ability to secure a higher credit score.

The Bottom Line

All credit scores fall in the 300 – 850 range, with 850 being the highest credit score possible. Achieving a credit score of 850 is possible, though it can be challenging for most consumers.

And that’s a good thing, because it’s not necessary to have a perfect credit score. But you should consider achieving a high credit score a priority. Keeping your credit score top of mind and securing a score of 740 or higher will allow you to qualify for the best rates on loan products.

Hanna Kielar

Hanna Kielar is a Section Editor for Rocket Auto℠, RocketHQ℠, and Rocket Loans® with a focus on personal finance, automotive, and personal loans. She has a B.A. in Professional Writing from Michigan State University.