What Makes An ‘Ideal’ Credit Score?

June 27, 2018

Besides knowing what counts and doesn’t count toward your credit score, what is the ideal situation that earns you that coveted high-700’s rating and all the low interest rates and amazing credit offers that come along with it? Here’s how it works:

 

What makes your ideal credit score:

  • 3 – 4 revolving credit cards each with high lines of credit ($10,000 or more) with a low balance carried on one. (note that you can – and SHOULD – pay this balance off each month!)
  • All types of credit on your report are at least 6 months old, with at least one that is 3 years old or more.
  • NO delinquent items on your report.
  • 1 – 3 or less hard inquiries over the past 6 months
  • All other loans are in good standing (car, mortgage, student loans, etc.)

Working to get there

As you can see, a lot of these criteria really have to do with letting time pass, and all are the result of consistent “good” money behavior — paying bills on time and using credit responsibly. If you’re planning to buy a house or take out some other type of loan in the future and you don’t have all of these conditions in place, it’s best to start ASAP with working toward it.

For example, if you only have 2 cards in your name, open another one then also call the other two and see if they will increase your limit to $10,000 or more – these are all actions that will result in “hard” inquiries, so you’ll want to do this at least 6 months before applying for your loan.

You don’t have to actually use that new card, or your increased limit (in fact, you shouldn’t if your goal is to get a higher score), although using one card to pay some of your regularly occurring expenses and then paying it off each month will demonstrate that you are able to use credit in the way its intended.

Beyond that, if you’re just looking for the best score you can get, remember that there’s more to financial success than just a high credit score – try not to get too obsessed. Don’t forget the other, more important number to your overall financial security.