Aim High: What an 800 Credit Score Means and How to Get There
Reaching an 800 credit score gets you more than just bragging rights. Find out how to achieve it and the advantages once you do.
Author: Arro Team
December 6, 2022|Blog
Reaching an 800 credit score offers so many benefits. When you have excellent credit, lenders are more likely to approve your application for a mortgage, auto loan, or personal loan. Lower interest rates and higher credit limits are also among the perks. Find out how to achieve an excellent credit score and take advantage of all an 800 credit score has to offer!
What Is an 800 Credit Score?
When it comes to making credit-related decisions, lenders rely on a borrower’s FICO score, which is a measure of your credit management over time.
The FICO scoring system ranges from 300 to 850. Here’s what this credit score range means:
Under 580: Poor credit score
580-669: Fair credit score
670-739: Good credit score
740-799: Very good credit score
800-850: Exceptional credit score
Keep in mind that about 35% of your FICO score is based on your payment history. So it’s important to always pay your bills on time to improve or maintain your FICO score.
It’s also important to know what FICO doesn’t take into account. The following doesn’t affect your FICO score:
Benefits of an 800 Credit Score
When you have an exceptional credit score, the world is your oyster, credit-wise. You can typically qualify for almost any line of credit at a better rate. Credit card issuers offer you their best rates and all sorts of perks (and higher credit limits, whether you need them or not).
You’re also likely to benefit from lower car loan and home insurance rates! Or maybe you took out a mortgage with a higher interest rate when your credit score was lower. Once you reach an 800 credit score (or even close to it), you can think about refinancing. Your higher score will help you get a better rate — meaning you’ll save potentially hundreds on your payment each month.
An 800 credit score means you’re the type of customer that credit card issuers want, which translates into receiving the best credit card offers. Think: zero-percent promotional rates on purchases and balance transfers, or generous, ongoing rewards bonuses. For instance, you could get high cash-back percentages from certain retailers, restaurants, travel purchases, and more. Of course, just because you have access to these perks doesn’t mean you have to use them — especially if it means spending money unnecessarily.
An exceptional credit score can also relate to job and housing opportunities. Employers and landlords often run credit checks, so an 800 score might mean the difference between landing a job or apartment, or not. If you’re competing for a job, someone with a better credit history might be seen as more responsible and get the job over you. When it comes to securing an apartment lease, those with a lower credit score might have to pay a higher security deposit.
One of the greatest benefits of an 800 credit score is psychological. Possessing excellent credit gives you more options in life. And who couldn’t use some extra peace of mind?
Tips for Working Toward an 800 Credit Score
The secret to getting an 800 credit score involves financial discipline. This might not sound like fun, and reaching the 800 level doesn’t happen overnight, but it’s possible if you stay focused over the long-term.
Let’s break down some strategies for getting an 800 credit score:
Use Your Credit Card Regularly and Responsibly
While you should use your credit card consistently, be sure to pay off your bill in full each month so you don’t carry a credit card balance. As a bonus, this also means you won’t be paying interest on your purchases. And of course, avoid late payments or missed payments, which immediately decrease your credit score.
Have a Good Credit Mix
FICO likes to see a mix of types of credit. Besides credit cards, that might mean a mortgage, auto loan, personal loan, or student loan — which are all types of installment loans. You borrow a specific amount of money and pay it back over time, with interest. Once it’s paid off, the loan closes.
Credit cards are considered revolving credit, meaning you can pay the entire balance off in-full at once or in smaller amounts over time, with interest. The line of credit remains open as long as you pay the minimum balance.
Keep Your Debt-to-Credit Ratio Low
Your credit utilization rate is synonymous with your debt-to-credit ratio. Determine your credit utilization ratio by dividing the amount of all your available credit by the amount of debt on those credit accounts. This only includes your revolving credit lines (e.g. credit cards), not installment loans (such as a car loan).
Keep your debt-to-credit ratio at 30% or less for now. That means if your available credit is $10,000, your debts should remain at about $3,000 or below.
As your credit score rises, try to reduce your credit utilization to 10%. In other words, keep your credit card balances low. We know it’s tempting to book a spring break vacation and put it on your credit card. But if you don’t have the funds to pay it off right away, it’ll put you further from your financial goals in the long run.
Just having credit cards without other types of credit, even if you follow the criteria for building good credit, can ding your credit score. A personal loan can boost your credit mix, but you should only apply for new credit when you need it. One situation that might make sense is if you’re carrying a credit card balance and want to pay it off. If you take out a personal loan that has a lower interest rate than your credit card, you can use the funds to pay your credit card off and add to your credit mix at the same time.
Keep an Eye on Your Credit Reports
What exactly will you be looking at when you check your credit report? Here’s what it includes:
Collections (unpaid debt that goes to a collection agency)
Public information, such as bankruptcy
Personal information, including current and past addresses, phone numbers, birth date, and Social Security number
Any errors can really harm your score or be a sign of identity theft (yikes!), which is why you should check it regularly. If you see any credit activity or accounts you don’t recognize, let the credit reporting agency know right away. You can take advantage of AnnualCreditReport.com to keep an eye on things, which offers a free credit report annually from each of the three major credit bureaus.
For a fee, you can also subscribe to a credit monitoring service. The service will send you an alert immediately if it flags suspicious activity. Some credit cards and banks even offer free credit monitoring as a perk.
Frequently Asked Questions About 800 Credit Scores
We’ve covered the basics about 800 credit scores above, but you might have more specific questions about this credit milestone. We’re here to answer them!
Is an 800 Credit Score Rare?
While not super rare, an 800 credit score is considered an exceptional credit score. The highest credit score isn’t far off, at 850. According to The Ascent, the average credit score is 711, which is considered a good credit score.
How Many People Have a Credit Score Over 800?
Just 22% of consumers have FICO credit scores of 800 or above. Want to be one of them? Follow the strategies we’ve shared and you’ll be on your way to getting the best rates and perks when it comes to financial services.
How Many Years Does It Take to Get an 800 Credit Score?
We’re not going to lie, it can take many years to achieve an 800 credit score. To reach an 800 credit score, the length of your credit history is usually a minimum of 15 years. Lenders need that timeline to see you’ve established good credit habits.
Even if you have bad credit now, don’t despair. It’s certainly possible to boost your credit score over time and earn a good credit score. It takes patience, diligence, and responsible credit management, but it’s not out of reach. The best day to start is yesterday and the second best day to start is today!
How Much Can I Borrow With an 800 Credit Score?
It really depends on several factors, like your annual income, employment status, the amount of time you’ve been at your job, and how long you’ve lived at your current address. Every person’s situation is unique, but generally with a higher credit score you can get access to greater amounts of credit at more preferential rates.
Can I Buy a House With an 800 Credit Score?
Yes! An 800 score is a good credit score if you’re in the market to purchase a home. You should qualify for the best interest rates. However, you’ll still need money for the down payment.
One note: If you’re buying a house with a spouse with bad credit, that’ll affect your mortgage qualifications. Speak to the lender about whether you can qualify for the mortgage using only your credit score.
Reach Your Credit Score Goals With Arro
At Arro, we offer a new way to build credit and reach your credit score goals. An 800 credit score can become a reality as you boost your personal finance skills. Get started on working your way toward an excellent credit score today. All you need are your bank account and Social Security number to see if you qualify for an Arro Card.