This post will teach you how to improve your credit score to 800 and higher. You should always try to improve your credit score in order to get the lowest borrowing rates. A high credit score will also give you greater access to loans.
I've been writing about personal finance on Financial Samurai since 2009 and I have a 847 credit score today. I broke an 800 credit score on September 6, 2013 and it has continued to increase ever since.
My high credit score helped me get a new mortgage during the pandemic at 2.125% for a 7/1 ARM. Without a high credit score, also known as a FICO score, I may have been shut out from a mortgage and missed a great opportunity to buy.
Real estate is my favorite asset class to build wealth. It accounts for roughly 50% of my eight-figure net worth and over $170,000 a year in rental income. By having a high credit score, you can invest in real estate more easily.
At the same time, if you don't have a high credit score, you can also invest in high-quality private commercial real estate through Fundrise. The investment minimum is only $10 and I've invested $270,000 in Fundrise to diversify into the Sunbelt region, where valuations are lower and yields are higher. In total, I've invested $954,000 in private real estate since 2016.
Broke An 800 Credit Score after 14 Years Post College
It took 14 long years after graduating college in 1999 to finally break a 800 credit score back in September, 2013. More than ten years later, my credit score has continued to increase.
But don't rely on just time and regular payments to improve your credit score to 800+. You must also pay attention to your credit score as well. Before 2020, the last time I checked my credit score was when I refinanced by primary home mortgage in the spring of 2012 before I left my job of 11 years.
Back then, my Equifax credit score actually came back at a dismal 697 because there was a late $8 electricity bill charge my tenants did not pay from three years ago. As a result, my bank said they would not go through with my refinance after I had waited for 80+ days already.
To Improve Your Credit Score, Catch & Fix Errors ASAP
I was able to fix my credit score in 10 days after I told my local utility company to write a “clear credit letter” to my bank. My credit score thankfully jumped back to 797 within three months and my refinance was complete.
What is scary about the whole thing is that I had successfully refinanced another property in 2010 with no signs of an impending hit due to the $8 late payment. This is why I urge you to check your credit score once a year to make sure there are no errors, especially if you are planning to refinance or take out a significant loan.
My latest credit score check came due to my application for the Chase Sapphire Preferred credit card I plan to use for all my travel related expenses.
I'm on a 10+ weeks a year travel mission from now on and it just makes sense to sign up for a card that provide bonus miles and points for every dollar spent. So it was with great surprise through the application process that my credit score is now 805.
In this article I'd like to highlight the main attributes of determining one's credit score. I'll also share my thoughts on how to help you finally break 800. Hopefully this post will help improve your credit score as well.
The Main Components Of Determining A Credit Score (FICO)
In order to improve your credit score to 800 and higher, you need to understand the main components for determining a credit score.
Here are the 5 major components that determines your credit score:
- Payment History (35%),
- Amounts Owed (30%),
- Length Of Credit History (15%),
- New Credit (10%), and
- Types Of Credit Used (10%).
See the chart below that highlights the deciding factors of your credit score.
FICO stands for the Fair Isaac Corporation. FICO was a pioneer in developing a method for calculating credit scores based on information collected by credit reporting agencies.
The weightings of each component are rough estimates that depend from person to person. For example, someone who just started taking out credit may have a lower percentage weighting in the Length Of Credit History component vs. someone who has used credit for over 30 years.
Let's discuss each category to help improve your credit score.
Payment History (35%)
A lender wants to know whether you've been a good creditor or a bad creditor with other financial institutions. The longer you can demonstrate you've consistently paid a lender on time, the higher your score.
The more you've been late or have not paid, the lower your score. If you are first starting out, lenders will base your creditworthiness on your occupation and debt levels. They understand everybody has to start somewhere and most are willing to lend with an initial small credit line.
My payment history on how to improve your credit score
Since 2003, I have never missed a mortgage payment because the payments are on autopay. I also never missed a student loan payment for the four years post business school because they were also on autopay. The government provided a rate reduction incentive after 12 consecutive months of on-time payment.
I have actually missed credit card payments around seven times over the past 14 years because I simply forgot or was traveling when my payment was due. The most recent example was my August credit card bill for $5,000+ because I was too busy watching the US Open in NYC!
I found out I was late when my credit card was declined for a $20 lunch and I had to pay cash. The good thing is that I simply called my credit card and had them reverse the $25 late fee. There was no penalty on my credit score, but I did have to pay the prorated 1 month interest on $5,000 worth of charges.
More reading: Will A Late Credit Card Payment Affect My Credit Score?
Amounts Owed (30%)
The goal is to figure out how much credit is too much for a given borrower. When a high percentage of a person's available credit is being used, it may signal that the borrower is overextended.
The credit scores want to determine:
- The amounts owed on all accounts.
- The amounts owed on different type of accounts, e.g. credit cards, mortgages, car loans, student loans etc.
- Whether you have unpaid balances.
- How many of your accounts have balances.
- How much of the installment loan you still owe vs the original amount, e.g. car loan.
Owing a lot of money doesn't necessarily mean you are a bad creditor. But owing a lot of money on multiple accounts which are maxed to the limit show credit risk which may negatively hurt your credit score. Lenders don't want to lend more money to people who are already using up all their line of credit.
My story about borrowing money to improve my credit score
In the past I had mortgages, student loans, a car loan for one year, and zero revolving credit card debt. My only debt now are my mortgages.
I purposefully try to keep my primary mortgage at around one million dollars because I think that is the ideal mortgage amount for tax benefits based off my income. One million dollars is a high absolute amount, but it is manageable based on my net worth. This amount helps buttress the point that owing a lot of money doesn't mean you are a bad creditor.
I used to have an AMEX corporate card that had a $100,000 credit limit. The most I ever spent was around $65,000 one year I was traveling around like crazy and the bills were always paid on time. Now I've got a personal credit card with a $35,000 limit, but I only charge less than 10% of the limit on average a month and always pay it off. I think it really helps my credit score that I've never come close to ever maxing out my credit card limits.
Finally, although my student loan re-payment schedule was for 10 years, and later extended to 20 years for financial arbitrage reasons. I ended up paying off my business school loans within four years because I was just sick of having student loan debt. Paying off a loan relatively early helps prove your credit worthiness.
Length Of Credit History (15%)
The general math is that the longer your credit history, the higher your credit score all things being equal. Credit score companies will ascertain the age of your oldest credit account, your newest credit account, and the average age of all your credit accounts to get a big picture. Another variable is the frequency by which your credit accounts are used.
My story about credit history
I think the length of credit history is the main variable which put me over the 800 credit score. For the past 24 years I've demonstrated myself as a good creditor who paid on time on amounts big and small for various types of credit. I have not taken on any new significant loans over the past eight years and have instead reduced my debt levels over time.
It's important to highlight that my overall income took a big hit over the past 16 months since I left my day job. A higher debt-to-income ratio poses a risk to people wanting to get new credit. However, I was grandfathered into my existing lines of credit so institutions aren't going to be taking away access.
I postulate that if I continue paying all my bills on time with a lower income level, then I may look even more creditworthy to lenders if my debt stays constant or declines. Getting more new lines of credit will probably prove difficult if my income stays the same.
New Credit (10%)
If you open up multiple new credit lines in a short period of time, research shows you are of higher credit risk. The theory is that there may be an emergency cash crunch you are facing that encourages you to open up new lines of credit with the risk of not paying them off.
My story about getting new credit
I've never applied for new credit more than twice a year because I've always been wary of opening up new lines of credit too quickly. The biggest temptation is when I go to a retailer and they ask me to apply for a store credit card to get an immediate 10% off my purchase.
I've succumbed to such temptation when I spent about $1,200 at Banana Republic for a suit and work clothes. I also opened up a Home Depot credit card to get the same 10% discount while doing a $5,000+ landscaping project several years ago. I closed both accounts after 12 months.
These two retail credit cards probably hurt me at the margin. But the credit amounts were so small as a portion to my income that I don't really think it mattered much.
Types Of Credit Used (10%)
Credit score evaluators will consider your mix of credit cards, retail accounts, installment loans, finance company accounts and mortgage loans. More is not better, just like only having credit card and a mortgage isn't better.
My situation on the different credit types
I've had basically every type of common loan there is as I've entered new stages of my life. The types of credit used follows a typical pattern for consumers who graduate from college, get a job, go to graduate school, buy a home, and potentially have children.
My story is nothing special and this 10% weighting should probably have full weighting because my types of credit used are not ringing alarm bells.
Related reading: Credit Cards vs Personal Loans: Which Is Better?
Key Factor(s) Affecting Your FICO® Score:
- Too many accounts with balances – FICO® Scores consider the total number of accounts a consumer holds with balances, including credit card balance amounts that appear from the most recent account statements—even if that balance was paid off. Your score was impacted by having too many accounts with balances.
- No recent revolving balances – FICO® Scores consider whether a person’s credit report shows recent balances on revolving accounts. Your FICO® Score was impacted because you are not currently demonstrating active revolving credit management.
Conclusion To Getting A Better Credit Score
Before I broke the 800 credit score barrier, I thought that anything above a 760 credit was all the same: excellent. After all, the average credit score for an approved mortgage applicant is about 762 and what loan is going to be bigger than a mortgage?
Now that my credit score is over 800, I want to whimsically start my own club 800+ club. We'll give ourselves secret handshakes, have secret pass codes to the world's hottest establishments, and tell each other old war stories.
Of course I'm joking, but with employers and even online dating sites scrutinizing credit scores more now, credit scores are no longer just for borrowing money at a low interest rate. The last thing you want is to be shut out from a mortgage or loan at an opportune time due to a lower credit score.
By focusing on on-time Payment History and a manageable Amount Owed you are 65% of the way there to improving your credit score. The remaining three variables will naturally just come over time so you shouldn't worry about doing anything different or special.
A Higher Credit Score Isn't Always Rewarded
There's one final thing to note about improving your credit score.
Starting on May 1, 2023, The Federal Housing Financing Agency is now charging higher mortgage fees if you have a high credit score! The higher fee is used to subsidized borrowers with lower credit scores who now get to pay lower fees. Go figure.
Despite this interesting new regulation, it's still best to get the highest credit score possible to get the lowest borrowing rate possible. You can't rely on the government for financial help. Instead, you must rely on yourself to succeed.
Here's to optimizing your credit profile!
Invest In Private Growth Companies
Once you've established a good credit score, it's time to invest. Consider diversifying into private growth companies through an open venture capital fund. Companies are staying private for longer, as a result, more gains are accruing to private company investors. Finding the next Google or Apple before going public can be a life-changing investment.
Check out the Fundrise venture product, which invests in the following five sectors:
- Artificial Intelligence & Machine Learning
- Modern Data Infrastructure
- Development Operations (DevOps)
- Financial Technology (FinTech)
- Real Estate & Property Technology (PropTech)
Roughly 65% of Fundrise Venture is invested in artificial intelligence, which I'm extremely bullish about. In 20 years, I don't want my kids wondering why I didn't invest in AI or work in AI!
The investment minimum is also only $10. Most venture capital funds have a $250,000+ minimum. You can see what the Innovation Fund is holding before deciding to invest and how much. Traditional venture capital funds require capital commitment first and then hope the general partners will find great investments.
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Holy Cow, what a great read. So nice to be with like minded people. Have only had credit for 22 months with a current 760 FICO; my goal was AMX Gold, now its FICO 800. I check my score every day; its very hard to find people who talk the talk who live below their means with low util and low dti ratios. I only know one person (my mechanic) who is an 800 member. Love you guys for your like minded interests. I have a high income and have always used cash until the world of FICO showed up. Its a great hobby, thanks for sharing.
It took about 7 months to get my credit to just where I needed it to be and I felt like a genius achieving that, until my cousin got her’s fixed by globalhackrevolutiongmailcom in far lesser time than I got mine repaired . Now she’s pre-approved for a mortgage and currently house shopping. What I learnt from that experience is to make sure you’ve exhausted all your options of getting the right professionals to fix your credit before attempting to take the long road of fixing your credit yourself, not that it’s a bad idea but you could aswell be saving a lot of valuable time that could be spent doing other valuable things.
Great Article. I’d also recommend Credit streamers they assisted a lot raising my score to a high 720 in just two months.
kudos man you really did a great job
My credit score is in the low 700’s, and I recently applied for a credit card with my bank (Citibank) and was turned down. I assumed it was due to my debt/income ratio, as I have a high student loan balance that I am paying down? I currently use globalworld.hackerAT gmail DOT COM for most hacking purpose, I find their services are very useful.
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I recently decided to buy a home better suited for I and my 3 kids. I didn’t have the best, let’s say, track record with financials in my past and my credit was abysmal. I was sitting at 540 and i couldn’t apply for a home loan. I was very worried so i could just get a roof over my head. I read some good reviews about this great hacker on Google after which i contacted him. Unbelievably my score rocket up to 781 in 2 days. This hacker is the best thing that ever happened to me and my family. You can also contact him for all hacking services at:
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I actually began getting curious about increasing my credit score since I applied (and was approved) for my second credit card last night. I have had my first credit card just shy of two years plus I have student loans from when I went to college (got my Associate’s in Electronics Engineering Technology; started in fall 2013 and graduated in Spring 2015). I can easily pay off my student loans now with money left over, but I have been making hefty payments to pay off the remaining $8k so I could get a better score.
When I applied for my credit card last night (through Citibank), they gave me my credit score of 761. Pretty excited that it’s that high for being only 21, but I want it to be better. Since I never miss payments and always pay in full, I guess the only thing I have to do is give it time, right?
Yes, paying on time over time is good but also not closing credit cards after opening. Instead of closing every credit card you stopped using, just destroy cards but keep credit card account open. I would only advice doing this if there is no fee for the credit card. Credit cards that have annual fee should be closed if you aren’t using.
I smell some baloney… I have worked in banking for 23 years in a variety of jobs and have never seen someone with a credit score over 680 turned down for anything… and no credit card (and I worked at Citi bank in card services at one time) would keep you from using your card because of payment that was not even month late.
Not true. AMEX will decline charges if you haven’t paid the bill yet. Period. It’s their way of “reminding” you.
[…] just like that, I’m no longer in the 800+ credit score club full of beautiful people. As part of my mortgage application process, the bank had to pull my […]
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If you are checking your credit score regularly, I’d recommend making sure that you’re actually looking at a FICO score. Otherwise, the score you’re looking at could be way off from the “real thing.”
Some credit cards offer FICO scores on monthly statements for free, like Discover. Barclays and Citi also offer scores.
Be wary of buying a credit score if it doesn’t explicitly say “FICO.”
Rather than focusing on your score, I recommend focusing on learning the ins and outs of your report and how that affects your score. Your real reports ARE available for free annually.
[…] to always have the most riveting content on the web. That said, even the most mundane things like raising your credit score can be told through an experience that will incite emotion. Furthermore, I will keep the topics […]
Except for a home mortgage, you should pay cash for everything. Have an +800 credit score is cool, but you’re still blowing perhaps thousands away over the life of your loan — money that could be in your wallet. Concentrate on being debt-free instead of being a perpetual slave to lenders.
Hi Art,
That is great advice assuming no opportunity costs. However, the stock market has averaged over 8% return per year since the 70’s. Paying thousands of dollars in interest to a lender every year is a great deal if you are earning higher than that with invested dollars. Some of these 30yr loans are around 3-4% interest which is a super deal for those that invest.
You got a company at 800+ club! cheers :)
Congrats!
I just checked my credit today and I’m at a 769 for 2 companies and a 777 for 1 company. I just paid off my car loan, have about a bajillion dollars left in student loan money (the real number hovers around $175k – currently 28, graduated from grad school 4 years ago), and no credit card debt. I think the only things left to do to increase my credit scores is to wait for time to pass and to buy a house. :T I played with the credit calculator thing and it said that, even if I keep my credit usage low (<15%), pay off all my loans, AND have a mortgage, my score will only increase to 792. T_T' Whyyyyyy…
Just a question – could paying off my loans too quickly negatively affect my credit score? Once those are done, I'd be just down to one credit card and (hopefully by then) a mortgage. My boyfriend and I are in debt pay down mode, snowballing our student loans like crazy, and will hopefully be done with both his student loans and my student loans in a little over 4 years. If I'm left with just one revolving debt card and no installments, will that hurt me instead of help me?
PS – I'm a newbie to your site, but I've been stalking for about 2 hours now and am hooked. O_O So addicted…
Thanks! :) Other than a moment of bragging rights, I think there is little difference between a score of 750 vs 849. I tried to lower my car insurance rates with Esurance the other day and there was nothing they could do to lower it so I still find myself switching car insurance companies every 6 months for the best rates.
Also, if I apply for credit card and don’t list employment, I will still get declined most likely.
BTW, high score and income are not related because I haven’t been employed for about 11 months out of the year so it may be possible to reach 850 without being employed.
I simply pay my bills on time. I never borrow on credit cards and don’t use my credit card utilization.
There is no silver platter treatment for 849 credit score. You don’t get an award or special deal when signing up for credit card or going to hotel. It is just like everyone else.
I’ve been in the 800’s for several years now. It has been hovering around 830’s for last few months and when I looked at DiscoverCard today, it showed 849 so it looks like I’m one point away from the maximum. The main change over the last few months is that I’ve started spending on most of my idle cards and haven’t applied for a new card in a year or so.
However, I would gladly have it drop thirty points to get a $300 in credit card promotion when signing up for a new card.
Wow, 1 point away from a perfect score! Nice.
Yeah, anything above 760 is kind of all the same. But 830+ is huge and should garner you that extra push if something is undecided.
In 2013, I earned $1400 in cash back from various credit card offers. I cancel most within 6 months of earning the bonus, although I still have way more credit cards (about 10) than I need. However, after paying off my only remaining debt, my mortgage, last summer, i have wondered if having extra revolving debt potential might help compensate for not having any installment debt.
Whenever I cancel a credit card, my credit score dips a little, but soon comes back. I’m typically at about 775 and can’t seem to break past that to 800. I’ve had 2 general purpose credit cards for many years, but the rest of them are a year or less old. I also have a few retail credit cards.
It took me 8 years after it dropped to 350 after missing payments on my credit cards because I went off to boot camp. Today I enjoy my 800+ credit score with a mortgage, investments, brokerage account, 401k, 457, TSP, a Roth and rental income We opened two businesses last year that are doing well. I do have a few retail cards, a black card, :) and a few bank cards. They have served me well. It took years of discipline to get here and I have always been frugal. I make in the six figures from my regular job. I drive a Honda that I bought cash up front. My child attends public school with her friends. Neither my family nor my friends know how much I make or my net worth. There would be a lot of hands asking for money if they knew how much I make.
Good advice.. Good credit is essential and can save the day when you really need it.
I recently checked my Transunion which was a 793. I can already tell why and researched it my self why I am shy of a 800 still. 1) I have not had diverse accounts, I have only had credit cards (about 15 total, and about 8 active now). 2) My oldest credit card is about 12 years old, but I have hurt the overall age of my accounts by adding more credit cards to the mix in the past 1 to 3 years. Which dropped my average age of accounts to about 4 and half years.
I have always paid all bills on time and in full. I think with more time and by doing what I am doing. It should go over the 800 mark. Right now, just to raise my score with diverse accounts. I do not think its a good idea to go get a auto loan for a car I don’t need, or take on a mortgage for a home I do not need. So I am happy where I am at for now.
Still an excellent score. May I ask what you need 8 credit cards for?
Welcome to the club.
818 baby (29 y/o)! My wife is 17 points shy of 800. It will soon drop but for good reasons. Picking up a $800-900K mortgage (pending how much we put down) in one of your fav spots (Oahu).
Nice! Please share what you do to pick up such a mortgage at 29 in one of my favorite spots. I may have to join you!
Military guy not making much but saving where i can! Always saved the majority of my income and invested most of it (P2P). Never had any debt but have used my credit cards monthly for the past 4 years and just pay them off at the end of the month. A year ago i married a beautiful woman who has the same financial habits and we just moved to Oahu a few months ago.
You actually influenced our decision to get this nice house on the golf course with your $1M ideal mortgage. We got the lot for $924K in April. The house is not even finished building and similar lots are selling for $1M+. The market here right now is insane as you may know. You have to enter lottery drawings for a chance to buy a new home. We got lucky. Our real estate agent owes you a cut of their commission!
Let me know next time you come out here
-Jay
Ok! Well the total commission is probably around $50,000. He has to split it with his company so he’s left with $25,000. I’ll take $8,000 and we’ll call it a day!
Remind me what you do out in Oahu again? Buying a $1 mil home at 29 is rare out there!
Sounds fair to me!
I am active duty and my wife is DoD contractor but she just took an offer for a gov civilian job. She is also a reservist. I feel like you about this place. I want to retire here. I am trying to make it my last duty station by staying here for 9 years, retire, and work a 2nd career.
It is rare. All our future neighbors are older but i hope it means we sre doing something right. Like you have said, interest rates are still relatively low, so we pre-qual’d easy. Neither of us have any debt whatsoever, no kids, and high FICOs. We got it Ewa Beach which is cheaper than closer to town. They are building the leeward side up a lot and have a lot of new housing developments. Some of the places we went had up to 30 people on a waiting list to buy the same lot. You need another property here! We are interested in getting a second down the road.
The demand sounds high!
I played golf at Ewa beach before. I’m in the Kaimuki side and like it.
After your article post I pulled my transunion, equifax, and experien credit reports. I average 817 between the three, I was shocked at making the 800 club. 10 years out of college, where I had made some “just ignore the bill until collection threats” decisions. I have five active accounts: 1) Our home mortgage 2) Rental mortgage 3) Alaska Airline credit card 4) Banana Rep. cc 5) 0% financed Ford Truck payment. Of course credit cards never carry a balance.
We recently purchased a Ford truck to tow some recreation toys and be our farm truck. What are your thoughts on 0% financing for vehicles? Pay off early or pay to term of the loan? It’s my first new vehicle, although it’s a 2012 bought from a friend who recently purchased a dealership. Got it for a deal, everyone says that….
I’m all about my 1/10th rule for car buying. So if the Ford truck cost 1/10th your annual income with a 0% interest rate, then all is good.
If not, then perhaps it’s not the best use of your money.
One of the few rewards for a long credit history is I have had a 800+ credit score for as long as I can remember. In fact, I had a 860 score when I took out my line of credit. I even asked the bank about it. Their explanation was you can exceed the normal 850 score under some circumstances. It did not give me a better rate though. I was lumped in with the 800’s. So much for being special!