What Is Excellent Credit?

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While the mechanics of excellent credit can be somewhat of a mystery, most people know there are tremendous benefits if they have it. Having "excellent credit" means you’ve proven you’re a trustworthy borrower who sticks to your credit agreements. Because of that solid reputation, you can borrow more money at lower interest rates and get access to the best products and services.

So what credit score qualifies as excellent? It depends on the credit scoring model. On Fair Isaac’s FICO 8 scale, the latest version of the most widely used scoring system, a score of 800 to 850 is considered excellent or “exceptional.” On the VantageScore 3.0 scale, the range for excellent is 781 to 850. The higher the number, the better.

Advantages of Excellent Credit 

Credit scores are calculated using information in credit reports created and maintained by Equifax, Experian, and TransUnion—the three major U.S. credit bureaus. These reports are regularly updated records of your credit history dating back to your first loan or credit card, if it's still open. Creditors and lenders rely on the three-digit scores as a summary of the individual credit reports at any given time.

A little over a fifth of people have an exceptional FICO score, and another 46% have a “good” or “very good” score. (For VantageScore, 23% fall into the excellent category and 38% in the good category.)

To find out where you fit in, you can check your score for free through a number of third-party providers including Credit Karma, Credit Sesame, or Capital One's CreditWise. You can also purchase your scores and credit reports from Fair Isaac at myfico.com.

FICO 8 and VantageScore 3.0 scores range from 300 to 850. Other versions of these scores may have different ranges. For example, industry-specific FICO scores range from 250-900. And the older VantageScore versions have a range of 501-990.

Having an excellent credit score opens the door to a multitude of benefits. For starters, you don't have to be anxious when applying for credit cards and loans, and you’re more likely to qualify for cards with generous rewards programs and no annual fees. 

You’ll also get more competitive terms, like lower interest rates that reduce your finance charges if you carry a balance and higher credit limits that give you more purchasing power. 

From applying for an apartment or utilities to shopping for the best deal on financing, excellent credit makes everyday life easier, and in many ways, cheaper.

Excellent credit gives you the best chance of being approved, but you can still be denied if lenders determine you’ve got too much debt or not enough income.

How to Achieve Excellent Credit

There are several ways to improve your chances of reaching an excellent credit score. 

  • First, make sure you borrow money. Credit scoring hinges on your history of responsible borrowing, so you must build a pattern of proper borrowing and repaying. 
  • Be diligent about making all your monthly payments on time. Payment history is one of the most important factors in your scores from both FICO and VantageScore. According to Fair Isaac, 96% of consumers with an 800 credit score pay their accounts on time. 
  • Keep your balances low. Maxing out your credit cards and paying the balance back slowly can hurt your ability to get excellent credit, even if you're paying on time. Consumers with excellent credit scores use 7% of their available credit. (That equates to a $700 balance on a credit card with a $10,000 limit.) This is also wise for keeping your finance charges down.
  • Keep your old accounts open and active. This helps lengthen your credit history and improves the average age of your accounts, both of which factor into your score. 
  • Don’t apply for too many new loans. New inquiries on your credit report can ding your score, and adding new accounts can lower the average age.

Bottom Line

Reaching the excellent credit threshold takes patience and discipline. And once you achieve it, there's no lifetime guarantee. Late payments, high balances, or even collections on other types of bills can damage your standing. Keep up healthy credit habits to maintain your credit score and all the perks that come with it.

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Article Sources

  1. Fair Isaac Corp. "What is a Credit Score?," Accessed Sept. 24, 2019.

  2. Experian Information Solutions. "What Is a Good Credit Score?," Accessed Sept. 24, 2019.

  3. Discover Financial Services. "Credit Resource Center: The Benefits of Having an Excellent Credit Score," Accessed Sept. 24, 2019.

  4. Discover Financial Services. "Credit Resource Center: How Is My Credit Limit Determined?", Accessed Sept. 24, 2019.

  5. The Financial Industry Regulatory Authority. "Personal Finance: How Your Credit Score Impacts Your Financial Future," Accessed Sept. 24, 2019.

  6. VantageScore. "Who Uses Credit Scores," Accessed Sept. 24, 2019.

  7. myFICO Blog. "The 5 Secrets of Excellent Credit Score Individuals," Accessed Sept. 24, 2019.

  8. Fair Isaac Corp. "What's in my FICO Scores?" Accessed Sept. 24, 2019.