By Porsche Miles Grant
You may be wondering if it’s possible to get a perfect credit score, and how many people actually have perfect credit. However, it is not impossible to obtain a perfect credit score. It just takes YOUR efforts! According to Fair Isaac &Company (FICO), only 1% of the American population has a perfect credit score. Credit scores range from 300-850, so that 1% of the American population has a FICO credit score of 850. Impressive! But 1% is not much, and for those of us who credit scores are average (678-695), we may feel that a perfect score of 850 if is a bit of a reach to obtain. Nevertheless, there is hope, and I am here to provide it. Research shows that approximately 14% of the population has no credit at all. Therefore, if you have some credit, you are well on your way to achieving that perfect score.
Credit is critical in today’s world, and can make us or break us. It can afford us job and financing opportunities, as well as help to eliminate financial burdens and barriers. As a result, we should all be striving for that perfect score, but not stressing to receive it. Instead, putting forth a little effort each and every day. Even if you are not aiming for a perfect credit score, you should still be dedicated to increasing your score as much as possible. So, what does it take to increase your score, and achieve that goal of being in the perfect credit score range (760-850)? I’m so glad you asked! Remember, I can lead you to water, but I can’ make you drink. It is solely up to you to take the knowledge I am providing, and put in the effort, time and, energy to make it happen.
Without further ado, research shows that individuals who are in that perfect credit range of 760 and up, maintained between 4 to 6 revolving credit accounts. Meaning with each line of credit, they managed to use each account, and keep it in good standing. Paying bills on time, every time, while properly managing their other lines of credit. FICO has identified revolving lines of credit (credit cards) as the number one account that is looked at as a factor to impact your credit score positively or negatively. Another way to increase your score is by having a variety of credit (lines of credit, and installments).
Lines of credit are great, but having an installment loan (mortgage or auto) in addition can really help to boost that credit score. Installment loans are fixed. Each month you pay the same amount, on the same day, until the loan is paid off. Doing so demonstrates financial responsibility, diligence, and the ability to maintain your finances to creditors. Upholding such positive behavior helps to increase your score. Moreover, it is also helpful to keep accounts open for long periods of time. It is never wise to close credit cards that you are no longer utilizing, unless they hold annual and monthly fees. This is because, the closing of those cards has the potential to drop your credit score. Having a long history of credit is one of the factors that make up your credit score. In fact, it is 15% of your score. Remember, the longer, the better!
Another big influence on reaching that perfect score range is NO LATE PAYMENTS!!!! 35% of your credit score consist of your payment history. Your payment history tells future creditors how you pay, and how often you pay. Do you pay on time every time? Do you pay a little on time and the rest later? Or do you pay when you’re ready? It is idea for individuals to pay on time for at least 7 years. This is the type of behavior that lands you in that perfect score range. Of course, there are more tips to be given that are responsible for helping you reach that ideal credit score, but for now bone appetite. Look out for the continuation of this article in future additions of The New Citizens Press.
Porsche Miles Grant is a Certified Financial Counselor and Certified Paralegal. She is currently pursuing a Master’s degree in Organizational Leadership.
She may be reached at Porsche.firstname.lastname@example.org or 313-753-2696. You may also find her at https://www.facebook.com/financesandeducation
This column was printed in the July 10, 2016 - July 23, 2016 edition.