Having a good credit score is crucial for financial stability and freedom.
A high credit score can help you get approved for loans, credit cards, and rental applications, and can even lower your insurance premiums.
Achieving a perfect credit score of 850 may be difficult, but it’s not impossible. In this blog, we’ll explore how to achieve a perfect credit score.
Pay your bills on time
One of the most important factors that determine your credit score is payment history.
Paying your bills on time is essential to maintaining a good credit score. Late payments, even if they are just a few days late, can negatively impact your credit score.
To achieve a perfect credit score, you need to make all of your payments on time, every time.
Keep credit utilization low
Credit utilization is the amount of credit you use compared to your credit limit.
High credit utilization can lower your credit score. To achieve a perfect credit score, keep your credit utilization below 10%.
For example, if you have a credit limit of $10,000, you should aim to keep your balance below $1,000.
Maintain a long credit history
Credit history is the length of time you’ve had credit accounts.
A long credit history can improve your credit score. To achieve a perfect credit score, you need to maintain a long credit history.
This means keeping your oldest credit accounts open and active, even if you don’t use them regularly.
Limit credit inquiries
Each time you apply for credit, it can have a negative impact on your credit score.
To achieve a perfect credit score, limit the number of credit inquiries on your credit report. Only apply for credit when you need it, and try to space out your applications to avoid multiple inquiries within a short period of time.
Monitor your credit report
Monitoring your credit report is essential to maintaining a good credit score. Errors on your credit report can lower your credit score, so it’s important to review your report regularly and dispute any errors you find.
You are entitled to one free credit report each year from each of the three major credit bureaus (Equifax, Experian, and TransUnion), so take advantage of this and check your credit report regularly.