Credit Repair

What People With Excellent Credit Focus On

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“Excellent.” There’s something to be said for that word, especially when it comes to your credit.

People with a high credit score reap a lot of benefits: lower interest rates, more attractive loan options, better credit card offers and a certain inner peace from knowing they have financial options. But what separates those with excellent credit from those whose credit is simply good? How much of a difference are those points worth, and how can you make your credit score jump to the next level?

Here’s a look at what people with excellent credit know, and how you can become one of them.

What is an excellent credit score?

First, it’s important to know the range of an excellent, or exceptional, credit score. A credit score — calculated by a company like FICO or VantageScore — is a number in the range of 300 to 850. It weighs your credit usage, including the length of time you’ve held credit, your credit utilization ratio, your history of paying bills on time and any new lines of credit you may have opened. It can also be affected by hard checks on your credit, which may be performed when opening a new credit card or, say, applying for a car loan.

While a credit score is an individual number, potential creditors tend to divide would-be borrowers into segments depending on where their credit score number falls. For FICO, poor credit is a score below 580. Fair credit is between 580 and 669. Good credit is between 670 and 739. Very good credit is between 740 and 799, and an “exceptional” credit score is 800 and above.

For your VantageScore, 300 to 549 is very poor, 550 to 649 is poor, 650 to 699 is fair, 700 to 749 is good and 750 to 850 is excellent.

What do these mean? For one, they can make a difference in the credit products a lender offers, the loans you may be eligible for and even your eligibility to rent an apartment. In some cases, employers may even look at credit scores and worry that an employee with poor credit could be unreliable on the job. (Not all states allow potential employers to do credit checks, and, as per the Fair Credit Reporting Act (FCRA), you must be notified that a credit check will be completed during the application process.)

Different creditors use different credit scores, and you may find that your score varies between VantageScore and FICO. All three credit reporting agencies provide information to both FICO and VantageScore.

If your score isn’t where you’d like it to be, there are ways to make changes. Here are some things to consider that might raise your credit score.

7 ways to keep an excellent credit score

Not happy with the segment you fall into? Credit scores change monthly, and positive behaviors, like paying off a balance, can make a big difference. Here are some habits of people with excellent credit scores.

1. Always make payments on time

Sometimes a bill gets lost in the shuffle. If that happens, make sure to call your card’s customer service department. Sometimes, it may be possible to get a late payment waived from your record, especially if it happened only once. It’s a good idea to also consider setting up autopay on all bills, so you’ll never miss a payment again.

2. Pay attention to your credit utilization ratio

Your credit utilization ratio — or how much debt you have versus your overall credit limit — is a large component of how your credit score is calculated. The rule of thumb is to keep credit utilization below 30%. When that may not be possible — say, you have several large expenses you’re putting on a credit card, with plans to pay the balance with an upcoming bonus — it may be smart to divide the bill across cards or use the card with your highest limit as your designated “emergency” card.

3. Keep balances as close to zero as possible

One myth some people believe is that people who carry a balance on a card may have the potential to have a higher credit score than those who don’t. This is not true. While you may sometimes have to carry a balance from month to month, aiming for a low balance, having a plan to pay it off and keeping card balances at zero are all smart ways to keep your score high.

4. Keep cards open

Even if you rarely use a credit card, it may be a good idea to keep the account open. That’s because part of your credit score is based on your credit history. Closing a card may temporarily lower your score. If you feel you must close one of your cards, you may want to avoid closing the card you’ve had the longest.

5. Consider higher credit limits

If your card issuer offers a higher credit limit, it may be a good idea to accept — even if you’re not planning to ever come close to that limit. This is because having a higher line of credit can decrease your credit utilization, which can improve your credit score.

6. Regularly check credit reports

Even when you have excellent financial habits, it’s smart to stay on top of your credit and regularly check your credit report. This can raise red flags if any accounts have been opened in your name, or if there was a missed payment you may have forgotten about. Regularly checking your credit report and promptly solving any potential problems can help raise your credit score.

7. Use credit as a tool

Credit isn’t something to be afraid of. While irresponsible credit usage is problematic, people with excellent credit may see their credit and their credit cards as tools giving them access to rewards, competitive interest rates on loans or other offers that could potentially lower spending. Knowing how to use credit to work in your favor can separate those with excellent credit from others, and it can make excellent credit something worth obtaining.

Is it worth it?

So is excellent credit worth it? In many ways, yes. But don’t stress if you don’t have excellent credit just yet. Even going from “fair” to “good” credit will potentially snag you better interest rates and more competitive offers. Excellent credit may also take time to build. If you’ve only recently started using credit, then your lack of credit history could make it hard to achieve a high score. Just be patient. Knowing how credit scores are calculated, keeping track of your own credit score and setting small goals to raise your score are all ways to help achieve that “excellent” score in the future.


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