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- An excellent credit score is anything above 800, according to Fair Isaac Corp.'s FICO model.
- An excellent credit score gives you lower interest rates and other benefits on borrowed money.
- Excellent credit scores require multiple open accounts, low utilization ratios, and no late payments.
Credit scores are an essential part of adulthood. The three-digit number is an indicator of your trustworthiness as a borrower. The higher your credit score, the easier it is to borrow money.
A credit score categorized as "excellent" will put you in the highest echelon. With it, you'll see benefits such as the lowest available interest rates, higher borrowing limits, easy approval for rental apartments, and cheaper auto insurance. While obtaining an excellent credit score can be difficult, you'll find that it's worth the effort.
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What is an excellent credit score?
There are two different credit scoring models: FICO and VantageScore, both of which range from 300 to 850. Each model divides this range into five categories: poor, fair, good, very good, and excellent. Excellent credit scores start at 800 for FICO and 781 for VantageScore.
The credit score ranges for the five score categories for FICO and VantageScore are as follows:
| Credit score category | FICO | VantageScore |
| Poor | 300-579 | 300-499 |
| Fair | 580-669 | 500-600 |
| Good | 670-739 | 601-660 |
| Very good | 740-799 | 661-780 |
| Excellent | 800-850 | 781-850 |
How to get an excellent credit score
Credit scores in the US have been steadily rising over the past two decades. In October 2005, the average FICO credit score was 688. The average credit score in 2023 is 718 for FICO and 701 for VantageScore. Additionally, the percentage of Americans with excellent credit scores rose from 16.2% in April 2005 to 24.1% in April 2023.
This is partly because new credit builder accounts and rent reporting services have made it easier to establish a positive credit history. Additionally, there are many more educational resources now publicly available on how credit scores are calculated.
Understanding the factors that contribute to your credit score is key to improving it. Here's how VantageScore and FICO scores are determined:
| FICO | VantageScore |
Payment history (35%) Credit balance (30%) Length of credit history (15%) New credit (10%) Mix of credit accounts (10%) | Payment history (40%) Length & type of credit (21%) Percent of credit used (20%) Total debt/balances (11%) Recent credit behavior and inquiries (5%) Available credit (3%) |
With this foundation laid out, let's look at ways to improve your credit score to achieve excellent credit.
1. Pay your bills on time — every time
As payment history is the most important factor used to determine your credit score, having a negative mark like a delinquent payment can lower your credit score and ruin your chances of an excellent credit score for years.
You can set up automatic payments on your credit accounts if you're having trouble keeping up with various accounts and due dates. Looking into debt consolidation may also help simplify your debt. With credit cards in particular, it may help if you pay off your credit card balance several times each month.
2. Keep your credit utilization rate low
Your credit utilization ratio indicates how much of the money you're currently borrowing compared to your credit limit on revolving credit lines. It's generally recommended that you keep this ratio under 30%. However, the lower your ratio, the better.
A survey of 100,000 LendingTree users with excellent credit scores found that the average consumer with an excellent credit score keeps a credit utilization ratio of 5.7% on a credit limit of $58,514 spread over 7.9 accounts. Meanwhile, the average person living in a large US metro uses 16% to 33% of their credit limit.
But that doesn't mean you should remain 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. According to Experian data on consumers with 850 FICO credit scores, the average personal loan balance of consumers with perfect credit scores is $32,872 compared to the average consumer, who has $17,064 of personal loan debt. That said, consumers with 850 FICO scores had roughly half the amount of credit card debt compared to the average consumer, $2,558 to $5,221.
While you can keep your utilization ratio low by consistently paying off your balances, you can also increase your credit limit. A higher credit limit means your spending won't have as large of an impact. You can request a credit limit increase every six months or so.
3. Keep credit inquiries to a minimum
When you 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.
Each hard inquiry lowers your credit score. Several hard inquiries at once will have a greater impact on your credit score and may raise red flags for lenders because they signal a high volume of new accounts in a short period of time. This may indicate to lenders that you might be prone to overspending.
That said, a hard inquiry shouldn't prevent you from applying for more credit. On average, consumers with perfect credit scores have 5.9 credit cards compared to the average 3.9 credit cards.
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On Self's website
Perks
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Regular Annual Percentage Rate (APR)
15.72% to 15.97%
Fees
$9 administration fee
Loan Amount Range
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$600 to $3,600
Pros
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Cons
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Insider’s Take
Self's credit builder loan is one of the few credit-builder loans available in all 50 states. Self offers four payment plans between $25 and $150 per month, all of which take 24 months to complete. Self doesn't perform a hard credit inquiry, and it reports to all three credit bureaus, but that's the bare minimum for a loan designed to build credit.
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Product Details
- No hard credit report pull
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- 24 months loan duration
4. Age of accounts matters
Across all age groups, the average person with excellent credit has 21.7 years of credit history. The longer a borrower has held onto an account in good standing, the more positive the impact on their credit score. Even the average Gen Zer, the youngest generation included in LendingTree's analysis, has an oldest active account of 17.9 years.
It is important to note that credit scores do not happen in a vacuum. For example, a member of Gen Z, which the LendingTree survey categorizes as someone who is between 18 and 24 years old, could only have an oldest active account of 17.9 months if someone made them an authorized user on a credit card when they were a child.
Credit scores are also correlated to income level, as building credit can be cost-prohibitive. Many credit cards available to people with bad credit will have higher APRs or require cardholders to put up collateral in the form of a security deposit or their possessions.
Though you don't necessarily need an excellent credit score, it can certainly help you lead an easier financial life.
Excellent credit score frequently asked questions
What is the best credit score?
An 850 is the best credit score you can have. Just 1.31% of all consumers have 850 credit scores.
What percent of the population has a credit score over 800?
24.1% of consumers have a FICO score between 800-850.
Do I need an excellent credit score to qualify for a loan?
You don't need an excellent credit score to qualify for a loan. Minimum credit score requirements for a personal loan is in the mid-600s. However, you will qualify for better interest rates with an excellent credit score.
Tanza is a CFP® professional and former correspondent for Personal Finance Insider. She broke down personal finance news and wrote about taxes, investing, retirement, wealth building, and debt management. She helmed a biweekly newsletter and a column answering reader questions about money.Tanza is the author of two ebooks, A Guide to Financial Planners and "The One-Month Plan to Master your Money."In 2020, Tanza was the editorial lead on Master Your Money, a yearlong original series providing financial tools, advice, and inspiration to millennials.Tanza joined Business Insider in June 2015 and is an alumna of Elon University, where she studied journalism and Italian. She is based in Los Angeles.
Associate Editor at Personal Finance Insider
Paul Kim is an associate editor at Personal Finance Insider. He edits and writes about credit scores, debt, and identity theft.When he's not writing, Paul loves cooking and eating. He hates cilantro.
