While achieving a perfect 850 credit score is rare, its not impossible. About 1.3% of consumers have one, according to Experians latest data.
FICO scores can range anywhere from 300 to 850. The average score was 714, as of 2021.
The few people who do manage to achieve perfect credit scores tend to share three key traits, according to Experians latest analysis.
Having a FICO score of 825 is extremely good and considered excellent by lenders. This near-perfect score demonstrates responsible credit management and will qualify you for the best loan terms and lowest interest rates available.
What is a Good FICO Score?
FICO scores range from 300 to 850. The higher the score, the lower the perceived risk that you will default on a loan. Here are the score ranges and what they mean:
- 300-579 – Poor
- 580-669 – Fair
- 670-739 – Good
- 740-799 – Very Good
- 800-850 – Exceptional
A FICO score above 800 is considered excellent. Only the top 14% of Americans have FICO scores of 800 or higher. A score of 825 puts you in elite company when it comes to creditworthiness.
The Benefits of an 825 FICO Score
A FICO score of 825 will qualify you for the very best loan terms and lowest interest rates lenders have to offer. Here are some of the key benefits:
Easy Approval for Loans and Credit Cards
With a FICO score in the low 800s, you can expect easy approval for just about any loan or credit card you apply for. Lenders view borrowers with scores above 800 as very low risk. You’ll have no problem getting approved for mortgages, auto loans, personal loans, or premium credit cards.
Lower Interest Rates
The higher your credit score, the lower the interest rate lenders will offer you With a near-perfect 825 FICO score, you’ll qualify for the rock-bottom rates available – often below 3% for mortgages and 6% for auto loans. This saves you thousands of dollars in interest over the life of the loan
Higher Credit Limits
Lenders will likely approve you for higher credit limits and loan amounts given your exceptional credit score. This gives you purchasing power and flexibility. With mortgages, you may qualify to borrow more to buy that dream home.
Rewards and Perks
A credit score over 800 will qualify you for the most exclusive rewards credit cards with lucrative sign-up bonuses, high rewards rates, and VIP benefits Expect premium travel perks, bonus point offers, and special treatment
No Need for Down Payments
Your stellar credit score means lenders will waive down payment requirements in many cases. You can get a mortgage or car loan without having to put any money down upfront. This saves you thousands of dollars.
Lower Insurance Rates
Insurers use credit-based insurance scores to set premiums. Drivers with scores above 800 typically enjoy the lowest auto insurance rates thanks to their exceptional credit history. Excellent credit can save you hundreds per year on car insurance.
How to Reach an 825 FICO Score
A FICO score of 825 takes years of diligent credit management to achieve. Here are a few tips to reach the top tier:
- Pay all bills on time. Payment history has the biggest impact on your scores.
- Keep credit card balances low. Try to keep your utilization under 10%.
- Have credit for a long time. The length of your credit history counts, so keep old accounts open.
- Limit hard inquiries from opening new credit. Too many dings can lower your score temporarily.
- Have a mix of credit types, like mortgages, auto loans, and credit cards.
Checking your credit reports for errors and maintaining healthy credit habits over time are key to reaching an 825 FICO score. Be patient – it takes years to build credit that strong.
Is a Score Above 800 Necessary?
A FICO score above 800 is considered exceptional, but you can still get approved for loans with excellent terms at 760 or higher. And a score of 825 is just 25 points from a perfect 850. At this level, improving your score further really doesn’t benefit you much more.
Once you’re over 800, it’s more important to keep up responsible credit management rather than obsess over a specific score. A small fluctuation either way won’t really impact your loan terms. Focus instead on maintaining your strong credit history over time.
Summary
A FICO score of 825 is about as close to perfect credit as you can get. This elite score signifies a pristine credit history and excellent credit management. You’ll qualify for the very best loan rates and terms, higher credit limits, and premium rewards credit cards. Maintaining strong credit behaviors over many years is the key to reaching scores over 800. An 825 FICO score proves your creditworthiness and gives you financial power and flexibility.
People with perfect scores are typically older
“Youre not likely to see many 25-year-olds with a perfect credit score,” Matt Schulz, chief credit analyst for LendingTree, tells CNBC Make It.
The majority of people with 850 credit scores are above the age of 57, according to Experians report. About 70% of people with perfect credit scores are baby boomers (defined by Experian as people age 57 to 75) and members of the silent generation (ages 75 and above).
Generation X (ages 41 to 56) account for about 22% of people with perfect scores. Meanwhile, only about 4% of that group are millennials and Gen Zers (ages 40 and under).
Since lenders want to see that youve demonstrated a consistent ability to handle credit well over a long period of time, length of credit history has a big impact on your credit score. This is why older generations, who have had a longer time to build credit, tend to have higher scores than younger ones.
They have less debt in general
People with an 850 credit score tend to have less debt in other categories, Experians report reveals.
For example, they typically have an auto loan balance of about $17,000 compared to the national average of nearly $21,000. Perfect scorers also carry below-average balances on auto loans and mortgages.
That doesnt hold true for every type of loan: People with an 850 credit score carry an average balance on personal loans thats nearly double than the national average.
However, the average interest rate for a personal loan is around 8.73%, compared to the average credit card interest rate, which is around 16.65%, according to the Federal Reserves latest data.
Overall, people with an 850 score demonstrate their creditworthiness to lenders by persistently paying down different types of debt.
How Rare Is 825 Credit Score? – CreditGuide360.com
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