A Perfect Credit Score: How to Get to 850 in Three Simple Steps

Maintaining a perfect credit score is a great financial goal that every individual out there desires to achieve. A perfect credit score is usually regarded as anything between 800 and 850.  This is always a fantastic place to be since you will have no issue securing a mortgage, auto or any other loan at low interest.

Several pieces of information are usually used to determine your score and understanding the different variables that are used to determine the number is a step in the right direction. Your bad credit loan repayment history determines 35% of your score while your credit utilization ratio determines at least 30% of the score. The length of your credit history will account for 15% of your score while the types of credit and account inquiries contribute 10% each towards your final credit score.

Although it is rare to meet an individual with a perfect credit score, it is much easier to get there. It isn’t impossible. In fact, you can get a perfect score through surprisingly simple ways. Here is how you can get to 850 in three simple steps.

Start Paying All Your Bills in Full, and on Time, Every Month

One of the easiest and efficient ways to prove that you are a financially responsible individual is to pay your monthly bills on time. You should also start living within your means and purchasing items that you can only afford. For instance, never use your credit card to buy an item that you won’t be able to pay off its cost on time and in full.

You need to remember the fact that being late on payment has a huge and negative effect on your credit score. If you took out a bad credit loan, make sure that you repay it on time if you want to improve your credit score. There is also no any advantage in paying only the minimum amount due on your credit card.  That will only result in you paying a lot of interest, which doesn’t improve your score in any way. Therefore, develop a habit of saving money and paying your entire bill once.

Automate Your Finances

Are you always a victim of late payments?  Being late on your monthly bill payments is not only detrimental to your credit score but also expensive since you have to pay penalties. Automating your finances can save you from such a situation. The best thing about automating your finances is that you do everything passively with no hassle of moving your money around and no pains of seeing your money go away.

Keep in mind that your payment history determines 35% of your credit score which can help you reach the 850-mark much faster. Fortunately, there are lots of simple personal finance apps that can help you automate your finances- from saving to bill payment.

Keep Your Credit Utilization Low

Your credit utilization is the total amount of your available credit limit that you spend every month. For instance, if you have a $1000 credit limit on your card and you spend $100 in a given month, then your credit utilization will be 10%. Your credit utilization accounts for 30% of your score.

To achieve a better score, make sure that your credit utilization doesn’t exceed 30% of your available credit limit. Ideally, you should strive to keep your utilization at less than 10% because the lower your utilization rate, the better your credit score will be.

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