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Here’s Exactly What It Takes to Have an Excellent Credit Score

Here's exactly what it takes to have an excellent credit score
  • An excellent credit score is anything above 800, according Fair Isaac Corp.’s FICO model.
  • A recent LendingTree analysis revealed what the finances of people with credit scores of at least 801 look like.
  • People with excellent credit have an average of nine open accounts, a credit limit around $71,000, a credit utilization rate under 6%, and no record of late or missed payments in the past four years.
  • Visit Business Insider’s homepage for more stories.

Credit scores are an essential part of adulthood.

The three-digit number is an indicator of your trustworthiness as a borrower. If you have a low credit score, or none at all, buying a house, renting an apartment, taking out a loan, or opening a new credit card won’t come easy.

A credit score can be negatively influenced by late or missed credit-card, cell phone, utility, or loan payments, and by using too much of your available credit. It may require careful planning and diligence to repair a bad credit score, but it’s not impossible.

The average FICO score among Americans reached an all-time high of 704 last spring. The FICO model categorizes credit scores as poor (300-579), fair (580-669), good (670-739), very good (740-799), and excellent (800-850).

While the average American is in good shape, a recent LendingTree analysis of more than 60,000 people with excellent credit scores (over 800) gives us a peek into the financial lives of above-average borrowers — and it’s clear how they got there.

These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site, where you can find additional information. Bank and thift deposits are insured by the Federal Deposit Insurance Corp. Credit Union deposits are insured by the National Credit Union Administration. Many institutions have different rates on their own Websites than those posted on Bankrate.com. Please identify yourself as a Bankrate consumer to lenders to ensure you get the Bankrate.com rate. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the lender you choose, please let us know.

Rates were collected by Bankrate.com on the dates specified. Rates are subject to change without notice and may vary from branch to branch. Bankrate.com National APY Average and Bankrate.com Site APY Average are only available for MMA products in any denomination exclusively. For Savings products, neither national nor Bankrate APY averages are tabulated. For MMA & Savings products in any denomination, the presented Bankrate.com National APY Average and Bankrate.com Site APY Average are averages of the MMA products only, and are not inclusive of Savings products APY rates.

These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site, where you can find additional information. Bank and thift deposits are insured by the Federal Deposit Insurance Corp. Credit Union deposits are insured by the National Credit Union Administration. Many institutions have different rates on their own Websites than those posted on Bankrate.com. Please identify yourself as a Bankrate consumer to lenders to ensure you get the Bankrate.com rate. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the lender you choose, please let us know.

Bankrate.com’s Safe & Sound® service provides ratings information on the relative financial strength and stability of U.S. commercial banks, savings institutions and credit unions. Five stars is superior, one star is lowest rated. For more information click here.

Perhaps the most telling characteristic of people with excellent credit is this: They haven’t missed a single payment in four years of credit history analyzed by LendingTree, and they pay on time, every time.

But that doesn’t mean they’re debt-free. In fact, there’s no way to build credit without borrowing money, since it requires proving you’re able to pay back a lender on time and in full. Those with excellent credit scores have an average of $126,306 in outstanding mortgage debt, $11,162 in auto-loan debt, $4,261 in student loan debt, $2,579 in personal loans, and $392 in unspecified debt, according to LendingTree.

They’re also using far less of their available credit than the average American, with a credit utilization rate of 5.3% on an average credit limit of $71,353 spread over nine accounts. Meanwhile, the average person living in a large US metro has between $15,000 and $25,000 in available credit, of which they use 24% to 35%, according to LendingTree.

Credit-reporting company Experian recommends keeping your credit-utilization rate under 30%, but the lower the better.

Rates were collected by Bankrate.com on the dates specified. Rates are subject to change without notice and may vary from branch to branch. Bankrate.com National APY Average and Bankrate.com Site APY Average are only available for MMA products in any denomination exclusively. For Savings products, neither national nor Bankrate APY averages are tabulated. For MMA & Savings products in any denomination, the presented Bankrate.com National APY Average and Bankrate.com Site APY Average are averages of the MMA products only, and are not inclusive of Savings products APY rates.

These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site, where you can find additional information. Bank and thift deposits are insured by the Federal Deposit Insurance Corp. Credit Union deposits are insured by the National Credit Union Administration. Many institutions have different rates on their own Websites than those posted on Bankrate.com. Please identify yourself as a Bankrate consumer to lenders to ensure you get the Bankrate.com rate. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the lender you choose, please let us know.

Bankrate.com’s Safe & Sound® service provides ratings information on the relative financial strength and stability of U.S. commercial banks, savings institutions and credit unions. Five stars is superior, one star is lowest rated. For more information click here.

People with excellent credit also keep their credit inquiries to a minimum — just two in as many years, on average. When we apply for credit — whether it’s for a new credit card, a mortgage, or an auto loan — and a lender issues a credit check, it will appear on our credit report and may influence our credit score. This is referred to as a hard inquiry.

Too many hard inquiries may raise red flags for lenders, according to Experian, because they signal a high volume of new accounts in a short period of time, which “may mean you’re having trouble paying bills or are at risk of overspending.” Hard inquiries remain on a credit report for up to two years.

Across all age groups, the average person with excellent credit has more than 20 years of credit history. The longer a borrower has held onto an account in good standing, LendingTree explains, the more positive the impact on their credit score. Even millennials, the youngest generation included in LendingTree’s analysis, have an oldest active account of nearly 15 years.

Need help with your credit? Our partner Experian offers credit reporting and repair »

See your options for debt relief with our partner LendingTree »

  • Read more:
  • We asked financial planners for the best strategy to tackle credit-card debt, and there are 2 clear favorites
  • I paid off $40,000 of student loans in 2 years thanks to a math-based strategy I’d recommend to just about anyone
  • A financial planner has advice for a 30-something with over $100,000 in student loans who wants to buy a house near San Francisco: Don’t
  • 5 things to do now so you don’t have to think about money

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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