We’ll give it to you straight: You don’t need a perfect credit score to buy a home. Having a score that falls in the broader exceptional score range will still earn you access to the best interest rates and all the other perks that come with having rock-solid credit.
But, hey, why not shoot for the moon and land with the stars? Aim for a perfect 850 and you might land in this exceptional 760-and-up cohort.
If you are a perfectionist, though, and are determined to hit the 850 mark, know that it’s rare; only about 1.4 percent of the population has that flawless FICO score.
“Achieving a perfect credit score is largely out of your hands,” says Riley Adams, a licensed Certified Public Accountant and senior financial analyst for Google, who runs a personal finance blog Young and the Invested. For starters, even if you’re paying all your bills on time, it takes years to build perfect credit and achieving feats like paying your student loans off can cause a temporary drop in your score. (Yup, really!)
There are no “hacks”, per se, when it comes to reaching a perfect credit score, but there are habits you can start now that will pay off over time, Adams says. Where to start? Here, five expert-approved tips can help inch you closer to that elite 850:
Pay your bills on time, all the time
The first step towards perfect credit is paying your bills on time every single month. On-time payments make up 35 percent of your FICO score, so this is a biggie.
A single “30-day past due” report to the bureaus can bruise your score—and can bring it down even further if it gets reported to collections.
“Be meticulous about paying on time,” says Diana Burrell, communications specialist with Massachusetts-based Hanscom Federal Credit Union.
Her tip? Schedule your installment loan payments five business days prior to their due dates, then double-check to make sure they’ve been posted.
“I was almost late once because I didn’t realize that I’d put a time limit on my scheduled payments,” says Burrell, who purports an almost-perfect 830 FICO score. “Luckily, I caught my mistake before the payment was overdue.”
Keep your credit card balances low
For a healthy credit score, you’ll want to keep your credit utilization below 30 percent. Anything more, and it signals to creditors you may be overextended, which can affect your credit score.
But, when you are aiming for perfect credit, you’ll need to keep your credit utilization even lower: The average credit utilization rate is only 5.8 percent among consumers with perfect FICO credit scores, according to Experian.
Pro tip: Determine when your lender reports to the credit bureau so that if you make a big purchase, you can pay it off before the balance is reported, Burrell suggests. Your credit card due date and the report date might not be the same.
Another trick? Get in the habit of paying your credit card balance more than once a month, says Sara Rathner, credit cards expert at NerdWallet, a personal finance company.
“That can lower the total balance remaining on your card when your billing cycle ends, so that lower number is what credit bureaus see,” she explains.
Audit your credit report
By law, you’re entitled to a free credit report every year. It doesn’t have your scores on it, but it does have important nuggets of information like any missed or late payments or any bad debts that could be between you and that perfect score. In the meantime, you can use free credit-monitoring services to monitor your credit reports.
“Even if you’ve never missed a payment, there could be illegitimate negative marks on your credit reports,” says Dana Marineau, a vice president and financial advocate with Credit Karma, a personal finance company. “If you find incorrect marks on your reports, you can dispute them.”
In fact, one in five Americans have mistakes on their credit reports, according to a 2012 report from the Federal Trade Commission. While in many cases the change to the credit report had no effect on credit score, 13 percent of consumers did see a change in score after the dispute.
Limit your hard inquiries
Hard inquiries include a lender checking your credit for a loan or credit card, explains Keri Danielski, consumer finance expert at Mint and Turbo. These types of queries may appear on your credit report and negatively affect your credit score. A soft inquiry, like when you check your credit, won’t affect your score.
Since hard inquiries from applying for new loans or credit accounts stay on your credit reports for up to two years and can impact your credit scores for one year, you’ll more likely end up with the highest possible credit scores when you haven’t applied for new credit within the past year, explains Nathan Grant, an analyst with Credit Card Insider, a comparison site for consumer credit cards.
Give it time
Last but not least, you’ve got to let that credit score marinate.
“FICO scores take the age of your oldest credit line into account, so someone who has had credit for 30 or 40 years has an advantage over someone who’s just out of the gate,” Burrell says.
A 2011 analysis from SubscriberWise, an analytics-driven risk management firm, found the average age of the highest FICO-scoring consumers was 61. And a 2018 study from Experian found that Millennials have an average FICO score of between 652 and 665.
Still, don’t let that deter you.
“It’s not hard for someone with a short credit history to get an excellent, but not perfect, credit score,” Burrell says.
While you may not have the bragging rights of an 850, a 760 and up score will nab you the same benefits.