Getting a Perfect Credit Score: It’s Easier Than it Seems!

What is a Credit Score?

Credit score? What’s that? Simply put, it is a number given from your credit history that determines how creditworthy you are. Credit bureaus gather the information used to formulate your score . Credit scores are used to determine the risk of lending money and how likely it is to be paid off on time. If you don’t have a good credit score, it’s going to be harder for you to get a loan, and the better it is the more likely you will get the loan you’re looking for.

What is it Made up of?

5 factors make up your credit score. Which are length of history, types, new accounts, payment history, and the amount you owe. Each taking up 10%,10%, 15%, 35%, and 30% of your score respectfully.

Perfect Credit Score

On the FICO scale an 850 credit score is perfect. The FICO scale is the most used scale for determining your score. It is possible to make it a little bit better. Technically speaking, however, an 850 is plenty good enough. Getting it perfect doesn’t happen over night, it requires paying off your debts on time and managing your credit accounts . If you’re just starting out with building your credit, I recommend getting a secured credit card. This allows you to get comfortable before going to an unsecured card. Your own money backs a secured credit card. You’d put a security deposit down with your own money, and your credit limit for that month would be whatever you put in. Whatever you spend you pay off. It’s essentially like paying yourself back.

How Long Will it take?

For your credit score to be established, it’ll take roughly 6 months of activity. If you’re new, then theoretically it’ll be easier trying to build your score up to that 850 range. The reason being you don’t have any holes to dig yourself out of. However, if you already have bad credit because it’s going to take some time to dig yourself out of that hole. So, how do you do it?

Building your Credit Score

The one true way to build your score up to 850 is never miss a payment. 98% of perfect score holders have never missed a payment, and the 2% that did miss a payment had that happen on average 4 years ago. If you do end up missing a payment, that’ll set you back a year or four, and you definitely don’t want that. My challenge to you is this, stay on top of your debt payments, and you are for sure going to get to the prestigious perfect score!

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