Having an excellent credit score may seem like the quest for some mythical, unattainable grail, but it’s not as difficult as many consumers think. Equally so, having a credit score 785 and higher isn’t an exclusive club only for the wealthy.
MyFICO, the consumer division of FICO, dispelled the myths and shared the common habits of consumers with exemplary credit. More than 50 million or about 25% of all individuals with credit scores have a score of 750 or higher. You may be surprised to hear that “high achievers” still carry debt, and you can still have an enviable credit score without having a spotless credit record.
The most important shared traits include low debt to available credit ratios: not maxing out a credit cards and making payments on time. In general, the FICO score is determined by 35% payment history, 30% amount owed, 15% length of credit history, 10% new credit, and 10% types of credit.
“While people with a high FICO Score are not perfect, their consistently responsible financial behavior usually pays off over time,” Anthony Sprauve, credit score advisor for myFICO, said in a press release. “In a challenging economic period, the fact that we all have a chance to be high achievers is very good news. The lesson from these high achievers is that it’s never too late to rebuild and score high.”
Other common characteristics of credit score high achievers include:
- An average of seven credit cards including both open and closed accounts.
- An average of four credit cards or loans with balances.
- One-third of high achievers have total balances of more than $8,500 on non-mortgage accounts; the remaining two-thirds have total balances of less than $8,500.
- 96 % show no missed payments on their credit report, but of those who do, it happened four years ago, on average. Less than 1% of high achievers have an account past due.
- Approximately one in 100 high achievers has a collection listed on their credit report and approximately one in 9,000 has experienced tax liens or bankruptcies
- Overall, their average credit account is 11 years old
- Their oldest credit account was opened an average of 25 years ago and their most recent credit account averages 28 months old.
“Because a high FICO Score is typically achieved over time and takes into account dozens of variables, there are no ‘quick fixes’ for rapidly improving scores or repairing bad credit,” Sprauve said. “Practicing good credit behavior consistently over time and regularly checking your credit report for errors can be instrumental for achieving a high credit score, which can lead to better loan terms and lower interest rates. Achieving good credit health is a long distance event, not a sprint.”