When you apply for a loan or line of credit, the lender always evaluates your ability to repay debts. To do this, they look at the FICO level. This three-digit indicator reflects your previous experience with borrowing. A total of 800 gives plenty of benefits. This article will show you how to achieve such a high total.
Generally, the indicator ranges from 300 to 850. Around 35% of it depends on your prior borrowing behavior. The higher the result — the better. Top-rated companies reviewed on rapidcreditfix.com will help you raise it. 800 unlocks the most favorable conditions from lenders, including low interest.
The Advantages Of 800
First, applicants with an excellent total are most likely to be approved. This is because the total reflects their high reliability. Lenders expect them to make payments on time.
In comparison, somebody with 600 or 550 may be seen as a risky borrower — a person unlikely to meet their obligations in the future. If their application is approved, the lender will charge a higher interest. As a result, the same loan may cost them thousands of dollars more in the long run. Sometimes, scores diminish due to inaccuracies, which are fixed through DIY credit repair or professional services.
Another advantage concerns credit cardholders. You can borrow interest-free if you pay your balance in full monthly — most cards have a "grace period". The most desirable clients are offered an additional promotional rate. It allows them to use the funds for free longer.
How To Get To 800 And Maintain It
You do not need to be wealthy or have any privileges with reporting agencies. Generally, any individual with reasonable behavior may achieve the goal. Here is how to reach this impressive FICO total.
First, obtain your total. You may install a special app like Credit Karma or go to myFICO.com. Secondly, you may request a free copy of your document from each of the three major reporting agencies via www.annualcreditreport.com. This is crucial, as every lending institution may only share data with one of them.
If the level is less than perfect, go through your reports line by line. Are there any inaccuracies, false information, etc.? Unfortunately, your reputation may be tarnished mistakenly. The total will rise once you have the errors deleted. You may do this by yourself or delegate to a repair firm. If the details are accurate, here is what to do.
1. Never Miss Another Payment
Late payments are detrimental to your total. They make you look like a reckless borrower. If you are forgetful, set automatic payments or reminders on your phone. If you cannot fulfill your obligations due to force majeure events, negotiate with the lender.
2. Reduce Your Balance
Generally, it should constitute no more than a third of your credit card limit. The less — the better. For example, if the total amount of available funds is $5,000, use less than $1,500. Research by the Experian bureau says that consumers with the target credit score use just 11.5% of their limits on average.
3. Apply For Loans When You Really Need To
Every time you submit an application, the lender accesses your credit history. This leaves a hard inquiry on your report. Such entries account for roughly 10% of the score. When you really need to borrow more, do your homework to make sure your application is approved from the first try.
4. Wait For Derogatories To Become Outdated
Most types of negative items remain on reports for 7 years. Afterward, they disappear automatically. Hence, if the damaging information is accurate, all you can do is wait, pay off existing debts and take out new loans to pay on time.
How Long Does It Take To Improve Credit Scores?
The general prerequisites for success are several years of impeccable history and a mix of different account types. Your report must reflect your ability to manage various credit lines and installment loans successfully. The time you will need to get there depends on the starting point.
Most commonly, it takes several years to achieve the desired total. However, you do not always have to get to 800. Different lenders have different criteria, and the best conditions may become accessible with 700. Moreover, the requirements also depend on the type of loan. For example, mortgages insured by the government require a lower score threshold.
The Bottom Line On Better Credit
800 is a fantastic FICO score that unlocks the best conditions on loans and lines of credit. If your current result is lower, and the reports are accurate, follow our tips to develop better financial habits. If the data is flawed, dispute the errors yourself or contact a credit repair firm.
