Striving for Excellent Credit - Attain An Over 700 Credit Score

According to The Motley Fool and FICO, around 23 percent of American consumers today possess a credit score of 800 or higher (out of a total 850 maximum possible points). This should encourage you to reach for a credit score of at least 700, something you can easily hope to achieve. 

The bad news is that FICO jealously guards the particulars of its formula (though it reveals the five categories and their percentage components). This makes it impossible to tell you precisely what you need for perfect credit scores

We do know the credit choices that the consumers in the highest credit ranges make though. These actions include the following:

  • Average revolving credit lines are around 12 years old – with their first revolving credit card account opened up over 25 years ago. Length of credit history counts for 15 percent of total score with FICO.
  • They have not experienced hard inquiries on their credit report in nine months.
  • An impressive 95 percent of these high credit consumers (over 800 score) suffer from no delinquent credit accounts on their personal credit report.
  • Their typically 10 active revolving credit accounts combined contain an average carried balance of $1,446.
  • This under $1,450 in carried debt consumes a mere four percent of the high credit score consumers’ available credit limit. The average 800 plus score holders do not apply over 10 percent of any of their revolving credit accounts.

Such behaviour will help you score well over 700 personally. If you combine all of these credit characteristics in your lifestyle effectively, then you may even top 800 points.

Three Factors That Influence the Timeframe to Improve Your Credit Score

The time frame to improve your credit score is based on your ability to improve in the three highest counting credit score categories. According to FICO, these are your timely payment history (for 35 percent), your credit utilization ratio (for 30 percent), and your length of credit history (for 15 percent). 

Your payment history is the most important category. 

It takes up to six months to demonstrate a timely payment history that is up to date with the big three credit reporting bureaus of Experian, Equifax, and TransUnion.

Credit Utilization is a quicker time component. This is updated every month. In theory, if you paid down your balances in June to less than 30 percent, then by July or at the latest August your credit report and score would reflect the lower credit utilization ratio and give you the increased points in this second most important category.

Length of credit history takes time to build up. In this category they are looking at your oldest account as well as the average age of all your revolving accounts. By not opening new credit cards, you can help your established credit to age faster. You can always open new credit, but if you do this then try not to make too many applications at one time. 

These hurt you in two ways. More new accounts water down your length of credit history category. They also create multiple hard inquiries on your report, hurting your new credit component (comprising 10 percent of your score). 

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