How to Achieve A Perfect Credit Score

Good credit-crad management is necessary to get a perfect credit score.

A perfect credit score is 850, and only 13 percent of eligible individuals have scores above 800, according to MyFICO.com. If your credit score is sadly below this elite level, there are steps you can take to start improving it. Attaining an improved credit score takes time – sometimes as long as a decade. Though you may never attain a perfect score, you don't need to. Anyone with a score higher than 800 is going to get the best interest rates available.

Difficulty:

Easy

Instructions

1. Request a free copy of your credit report to check for errors. AnnualCreditReport.com is the only source authorized by the government to offer the free credit report the law guarantees, according to the Federal Trade Commission. Even if you do everything right, your efforts to obtain a perfect credit score will be derailed if there are errors on your credit report. If you find any errors, dispute them in writing to the appropriate credit-reporting agency.

2. Pay your credit card bills on time. Use services that send reminders, set up reminders in your computer calendar program or use your bank’s automatic bill pay system. If you use automatic bill pay, check often to make sure your payments meet or exceed those required by your bills. Payment history makes up 35 percent of your credit score, according to MyFICO.com, so paying bills late will make it impossible to get a perfect credit score.

3. Pay off your debt and maintain a reduced amount of debt. MyFICO suggests maintaining your credit card use to 10 to 20 percent of each of your credit lines and warns that your credit use percentage makes up 30 percent of your credit score.

4. Keep your number of credit cards low. Resist the temptation to sign up for every department store credit card offer out there. New credit makes up 10 percent of your credit score, and having too many inquiries for new credit can lower your score.

5. Don't close credit card accounts. It may seem like a good idea to get rid of a card you no longer use, but it can hurt your score in two ways. Losing the credit available on the card can make your debt ratio go up. Also, your credit history plays a role in your credit score, and closing an account you have had for awhile can shorten that history, which can lower your score.

Tips & Warnings

• If your finances are going through a disastrous period, do only what you can to pay down your debt and avoid incurring more debt. When you are back on track with your earnings and savings, don’t live by cash alone. Unless you use credit, and pay off your credit card purchases, your credit score may never improve even though your financial situation is secure. VISA, MasterCard and American Express are the best cards to use for improving your credit score

• Serious negative marks stay on your credit report for at least seven years and sometimes as long as 10 years. These negatives may remain on your report until you request to have them removed.

References

• MSN Money: Raise Your Credit Score to 740
• MSN Money: How to Get a Perfect Credit Score
• USA Today: In Search of Perfect Credit – How You Can Boost Your Score
• MyFICO.com: How to Repair Your Credit and Improve Your FICO Credit Score