What is a Perfect Credit Score?

Have you ever wondered what is a perfect credit score? We break down what goes into calculating your credit score, ways to improve your score, and why a good score is important.

What is a Perfect Credit Score?

Credit scores can range from 300 to 850, with 850 being considered a perfect FICO® score. About 1.6 percent of Americans have a perfect score. But an estimated 23 percent of U.S. consumers have scores of 800 or higher, which is still really good.

What are Credit Score Ranges?

Your credit information is stored by credit-reporting agencies, also called credit bureaus. Equifax, Experian, and TransUnion are the three largest credit bureaus. If you use credit, they probably have a record of it.

There are strict guidelines for reporting credit. The information is used to create credit scoring models and predict the likelihood a borrower will pay back debt. The models weigh a number of factors to produce a person’s credit score. A high credit score demonstrates to the lender your past credit behavior, which may make potential lenders more (or less) confident when evaluating your request for credit.

Under 499  Very Poor 
500-579  Poor
580-669 Fair 


740-799  Very Good 
800+  Excellent


What Factors Affect Your Credit Score?

Your FICO® score is developed from five weighted categories of information.

  • Payment history (35% of your FICO® score)

The single largest factor determining your credit score is whether you pay your current and past bills on time. Late payments, delinquent accounts, and debt in collections all negatively affect your credit.

  • Debt owed (30% of your FICO® score)

The amount of money you owe on credit accounts can negatively affect your score. Creditors want to know if you are spreading your financial self too thin. Your credit score will consider all your credit card balances.

  • Length of credit history (15% of your FICO® score)

This is a measurement of a variety of time-related factors including how long your accounts have been opened. It also looks at the average age of your accounts. Long credit history can positively affect your credit, while short credit history can negatively impact your score.

  • New credit (10% of your FICO® score)

New credit looks at any accounts that you have recently opened and credit inquiries. Specifically, they are looking at credit inquiries within the past 12 months.

  • Credit mix (10% of your FICO® score)

FICO® factors in different types of credit. They are looking for your ability to manage multiple accounts such as a mortgage, credit cards, and car loans.

budgeting to improve credit score


How do You Get a Perfect Credit Score – or at Least Closer?

Since your credit score is a mix of multiple factors it takes a variety of behaviors to increase your score.

  • Check your credit report for errors
    One in five consumers has a mistake on their credit report. You’re able to pull your credit report at no charge one time a year from each of the three bureaus. If you notice an error, you’ll want to follow the process for dispute resolution. This step is an easy way to improve your score.
  • Have your accounts in good standing
    Lenders rely on information from major credit bureaus. The more accounts you have in good standing the better.
  • Get a secured credit card If you’re not able to open a regular credit card, open a secured account. Secured credit cards are easier to get than most credit cards because one requirement is a security deposit.
  • Don’t apply for credit too often
    Retail stores are constantly offering specials for opening a credit card account but be careful not to apply for too many. Applying for a credit card can lead to a dip in your credit score, especially if you apply for multiple cards in a short period of time.
  • Lower your credit usage rate
    Work to keep your credit utilization ratio below 30 percent. Credit utilization is the ratio between your monthly credit card balance compared to your total available credit. A ratio of less than 10 percent would positively impact your credit score, while a ratio of more than 30 percent hurts your credit score.
  • Build your credit history
    Lenders want to see a history of responsible money management. Access to credit and a long credit history boosts your overall credit score. This is why you should keep accounts open, even if you’re no longer using them. Closing credit card accounts will reduce your access to credit, raise your credit utilization ratio, and give the notion that you have little credit experience. One exception to this general rule is if you have a credit card that charges an annual fee to keep the account open, even if you aren’t using it. Close any accounts that are costing you money and use the savings to pay off debt.
  • Pay your bills on time
    Sounds simple enough but it is easy to forget to get your payment in on time. If you struggle to remember what bills are due when set up accounts to automatically withdraw your monthly payments from your bank. If you are concerned about overspending on your credit cards don’t close the account, rather keep some open but cut the cards up or lock them in a secure place. Just be sure to check that your credit card company won’t close your account if you don’t use your credit card for a certain period of time, this would be stated in your credit card agreement.

Why Do Credit Scores Matter?

Having a higher credit score offers you several benefits.

  • Access to lower interest rates
    The higher your credit score the more likely you will have access to lower interest rates. You may qualify for competitive offers from various lenders, whether you need a mortgage, car loan, or personal loan. Lower interest rates translate to a lower cost of borrowing. It will also save you money over time since you won’t be paying as much in interest.
  • Higher loan amounts and credit limits
    If you have a high credit score lenders see you as less risky, so they are more likely to lend you larger amounts of money compared to borrowers with poor credit.
  • Lower insurance premiums
    Credit scores are factored into your insurance rates. If you have a higher credit score you are more likely to pay lower premiums on your car or home insurance because higher credit scores are associated with lower filed claims. Insurance companies see lower credit scores as taking on increased risk and more filed claims.
  • Boats, ATVs, Trailers, and other financing
    If you plan to take out any financing your credit score can impact how much you pay.

Looking to learn more about your credit score and interest rates? The team at Focus Federal Credit Union is here to help walk you through what you need to know to rebuild or establish credit.