Your credit score could probably be higher

The FICO score is a three digit number, ranging from 300 to 850, that shows, in a pinch, how worthy you are to obtain a loan or a credit card. A lender can look at your score and tell a lot from that number and can make a decision as to whether or not you will receive the loan you seek right on the spot. It stands to reason that if you want to have an easy time of securing loans when you need one that you will need to have a rock solid credit score. How can you achieve one?

It’s not as hard as you may think, but it does require time and discipline. If you have plenty of both, then here is all you need to know. In order to have a score of more than 800, you will probably need a credit history that includes the following:

An overall credit history of 30 years or so. Because of this, most people with higher scores are middle aged. It just takes time to establish that you have world class credit worthiness.

Somewhere between four and six credit cards. Fewer will probably not generate enough credit action and too many will make you a potential risk to max everything out. This is a reasonable number of accounts that someone might actually use in the course of day to day living.

No late payments during the last seven years. That’s none at all - not 30 days, and certainly not the damaging 90 days late. Paying your bills on time makes up nearly a third of your score. Lenders, after all, want to be paid on time.

Not too many inquiries. As we have noted before, an inquiry, such as a credit application, puts a small dent in your score. Too many in a short period of time can put a large dent in it. Then again, if you have a score in the 800 range, you won’t be making too many inquiries, since you already have good credit. A couple of inquiries per year is about right.

Your outstanding credit card debt does not exceed 30-35% of your overall debt limit. If you have a $10,000 limit on your credit cards, you will not owe more than $3000-3500 at any one time. The credit bureaus get panicky when people start using all of their limits. It generally means they can’t pay their bills.

It would help to have a car loan or a mortgage that’s current with no late payments.

That’s about it. If you can achieve all of that, you, too, can have a top credit score. If you think about it, it’s not really all that difficult. It’s just a matter of paying your bills on time, over time, and acquiring credit only when you need it and using it only when you need to use it. If you do that, over a period of several decades, you can have a score that puts you right up there with the Bill Gates’ and the Warren Buffetts of the world.

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