A good credit score opens up a lot of possibilities for you.
You can get the greatest credit cards and the lowest interest rates on any loans you take out by shopping around. If you apply for a mortgage without a good credit score, you’ll waste a lot of money.
It can even help you acquire a job or find nice housing because employers and landlords examine it frequently. It’s the financial industry’s best guess about your level of responsibility, and it has consequences that go beyond money.
With these top 10 tips, we will teach you how to increase credit score to 800 and above!
What Is The Benefits Of A High Credit Score
Credit scores range from 300 to 850. 850 is considered a perfect score because it is the highest credit score. It’s tough, but not impossible, to get a credit score of 850. While it would be nice to be able to boast about having a flawless credit score, you don’t have to do so to gain the benefits of having a good credit score. These advantages include:
- More favorable loan terms
- Interest rates are lower, which might save you money.
- Having a better likelihood of getting loans and credit cards
A high credit score demonstrates to a lender that you can manage your debt and are a responsible borrower, which leads to these advantages. Because you’re regarded as a lower risk, lenders might offer you better terms.
How To Increase Credit Score To 800 And Above
A credit score in the 800s is a significant achievement. It is entirely doable to attain, even if it will take some time. Here’s how to get going:
- Ensure that you pay all of your bills on time.
- Never use all of your credit cards at once.
- Do not apply for every credit card that comes your way.
An 800 credit score is a terrific objective, but it will most likely take many years to achieve because credit scores take age into account. Your credit score can rise as your average account age rises.
Exceptional Credit Scores: between 800 and 850. FICO® scores between 800 and 850 are considered excellent. When applying for new credit, people with scores in this range usually have a simple time getting approved, and they’re more likely to be offered the best possible conditions, such as the lowest interest rates and fees.
Credit Score Factors
Equifax®, ExperianTM, and TransUnion® are the three credit bureaus that can report your credit score. A FICO® Score or a VantageScore® may be reported by these bureaus. While the criteria used by both scoring methods differ significantly, the main aspects that influence score are the same:
- Payment history: Lenders want to know if you pay your bills on schedule.
- Length of credit history: Lenders can better evaluate your creditworthiness if you have a longer credit history.
- Multiple credit inquiries: Having a lot of credit queries will damage your credit score.
- Credit accounts: Credit cards and installment loans are two sorts of accounts that can help you improve your credit score.
- Credit card utilization: If you use all of your credit cards, your credit score will drop. It’s a good idea to limit your credit card usage below 30%.
What is a Credit Utilization Rate?
The amount of revolving credit you’re now utilizing divided by the entire amount of revolving credit you have available is your credit usage rate, also known as your credit utilization ratio. To put it another way, it’s the amount you owe now divided by your credit limit. In most cases, it’s given as a percentage.
If you have a total of $10,000 in credit available on two credit cards and a $5,000 balance on one, your credit usage rate is 50%, which means you’re utilizing half of the total credit available. You can compute an aggregate credit use rate as well as individual credit utilization rates for each of your credit accounts (called your per-card ratio).
How to improve credit utilization ratio?
These five tactics can help you improve your credit utilization ratio if you believe it is lowering your credit score.
1. Pay off your debts. Paying more than the minimum on your credit cards each month will help you pay off your debt. Consider making two or more credit card payments per month — even minor extra payments will help you pay off your debt faster and keep your utilization ratio low throughout the billing cycle.
2. Use a personal loan to refinance credit card debt. Credit card debt can be refinanced with a personal loan in a variety of ways. For starters, combining numerous credit card balances into a single (preferably lower interest rate) loan will minimize the amount of interest you pay over time, allowing you to put more money toward principal and pay off the debt sooner.
Second, many consumers find it easier to keep track of one monthly loan payment rather than several credit card installments. Finally, your credit usage ratio decreases if you keep your credit cards active after shifting the debt to a personal loan.
3. Request for a higher credit limit. You can also lower your credit use ratio by requesting an increase in the credit limit on one of your cards. According to CreditCards.com, 89 percent of consumers who request a higher credit limit receive one. 4 Let’s imagine you have a $8,000 balance on a card with a $10,000 credit limit. Increase your credit limit from $10,000 to $15,000, and your credit usage ratio will drop from 80% to 53%.
4. Submit an application for a new credit card. Applying for a new credit card is another approach to boost your total credit limit. A word of caution: while applying for a new credit card can help you lower your credit utilization ratio, it may not help you increase your credit score. Having many credit cards may entice you to spend more than you can afford to repay, wreaking havoc on your finances (not to mention your credit score).
5. After you’ve paid off your credit cards, keep them open. You lower your total balance by paying off the card. You retain your whole credit limit by keeping the card open, minimizing your credit utilization ratio.
How Long Does It Take To Raise A Credit Score From 700 To 800?
It can take anywhere from a few months to many years to improve your credit score from 700 to 800. While your financial habits and credit history will influence how long it takes, some elements have set deadlines.
A hard inquiry, for example, can stay on your credit report for up to two years. Your score may improve when difficult inquiries are deleted. The longer you have credit, the higher your score will be. Your credit history grows longer with each year you have credit, which helps your score increase.
How To Increase Your Credit Score?
You might be encouraged to improve your credit score now that you know a little more about them. Fortunately, there are a variety of strategies you can use to raise your score. Don’t get disheartened if you can’t improve your credit score right away. It will take some time, but with deliberate actions, it will happen.
1. Check Your Credit Report
The first step is to obtain a copy of your credit report and review it for any mistakes. Take the time to contest any inaccuracies you find. This can be accomplished by a simple digital procedure. Your credit score could be harmed by errors in your credit report.
2. No Late Payments
On-time payments can improve your credit score greatly over time, although it may seem obvious. Paying your bills on time should become a habit for you. If you have a habit of forgetting when bills are due, try setting up automatic payments.
3. Pay Off Your Debts
If you have any outstanding debt, make every effort to pay it off as soon as possible. Although a creditor may eventually give up on your unpaid sum, unpaid debt will have a significant negative impact on your credit score.
4. Lower Your Credit Utilization Rate
A high debt-to-credit ratio might have a negative impact on your credit score. To lower your utilization rate, you can either pay off your debt or ask for a credit increase. Another option is to pay off your credit cards early each month so that your listed balance is less than your monthly spending.
5. Consolidate Your Debt
Consolidating accounts could be an excellent alternative if you’re having problems keeping track of many accounts. You can combine several loans into a single monthly payment. You won’t have to keep track of many payments in this situation. You’ll also be aiming to improve your credit score.
6. Become An Authorized User
If you have a trusted family member with a strong credit score, you may be able to improve your credit score significantly. To improve your score, you can become an authorized user of their account.
This can, however, be a draining emotional load. If you don’t pay your bills on time, your credit score may suffer. Before attempting this strategy, discuss the benefits and drawbacks with a family member.
7. Leave Old Accounts Open
Keep your initial credit card open even if you use it infrequently. The length of your accounts is factored into credit scores, and an older account can help to increase your average account length.
8. Open New Account Types
The type of accounts you have open impacts your credit score. Your credit score will likely suffer if you only have one sort of account activation. Consider getting a credit card account if you only have a mortgage.
9. Go to your bank and get a line of credit.
You might be able to acquire a line of credit without a great credit score if you’ve been a long-time customer at your bank. You’ll improve your credit-to-debt ratio and credit score with this line of credit.
10. Open A Secured Credit Card
If you don’t qualify for unsecured credit cards, a secured credit card maybe your best option. Because secured credit cards are backed by a cash deposit, even consumers with bad credit can receive one. By demonstrating your creditworthiness with on-time payments, you’ll be able to raise your credit score with this card.
What Is a Demand Deposit?
A demand deposit account (DDA) is a bank account in which funds can be withdrawn at any time and without warning. DDA accounts can, but are not obligated to, pay interest on deposited monies. DDAs are commonly found in the form of checking and savings accounts.
Demand deposit accounts differ from time or term deposit accounts, in which monies are locked away for a set length of time and are rarely, if ever, accessible without penalty.
Best Credit Cards For High Credit Scores
Blue Cash Preferred Card From American Express
With the Blue Cash Preferred® Card, you may earn up to 6% cashback on daily purchases. Currently, the card provides 6% cashback on groceries and streaming services, 3% cashback on transportation and gas, and 1% cashback on all other transactions.
In addition, the card offers a 0% initial APR for the first 12 months, and users can receive a $300 statement credit after spending $3,000 in the first six months. Users must pay $95. yearly fee after the first year. To qualify for this credit card, you must have a credit score of 700 or higher.
Chase Freedom Unlimited
Check out Chase Freedom Unlimited if you want to get cash back on purchases without having to pay an annual fee. The credit card offers 5% cashback on travel expenditures, 3% cash back on restaurant and drugstore purchases, and 1.5 percent cash back on all other purchases at the moment.
There is also an initial 0% APR for the first 15 months, in addition to no annual fee. You’ll also get a $200 bonus if you spend $500 within three months of creating the account. The Chase Freedom Unlimited card requires a credit score in the high 600s.
Capital One Venture Card
The Capital One Venture can help you save money on your next trip if you’re a frequent traveler. The Venture card, which is available to anyone with a credit score of at least 700, allows customers to spend Venture miles for any travel-related purchase. As a result, miles can be utilized for more than simply plane tickets. They can be used for a variety of things, including hotel and cruise reservations, railway tickets, and travel agent fees.
The annual price is $95, but users can save money immediately by earning 2 miles for every $1 spent. There’s usually a welcome incentive when you sign up. New users can earn up to 100,000 extra miles by spending $20,000 on purchases in the first 12 months, as of this writing.
Knowing how to raise your credit score to 700 or 800 and taking the steps to do so will help you qualify for better credit cards and loans with cheaper interest rates and terms. Although it may take some time, the advantages could be well worth the wait. The first step toward improving your credit score is to understand where you are.