What is perfect credit and is it even possible?

what is perfect credit

A perfect credit score is 850. It is possible to get to this number, but it is extremely rare. Only about 1.2% of consumers have perfect scores.1

In the world of finance, a credit score is used as a quick and simple indicator of your financial history. If you are interested in borrowing money from a lender or even applying for an apartment rental, your credit score is essential. 

Having good credit is crucial, but is it possible for someone to get a perfect credit score? 

History of a Credit Score

The establishment of the FICO score occurred in 1989. Prior to that year, lenders used personal judgment, zip codes, and references to determine if someone was eligible for funding. This made it hard for many people to get approved for money. 

Before the use of credit scores such as FICO scores, you could have been denied a loan at the bank simply because you didn’t dress up in business attire. A bank agent would have looked at you and deemed you were ineligible for financing simply because you decided to wear jeans on your day off from work. 

The FICO score offered lenders the ability to calculate a person’s financial worthiness through various factors. A FICO score can range from as low as 300 to a perfect FICO score of 850. The average FICO score in the U.S. (as of April 2023) is 716.Which means that most Americans have a good credit score! And if you don’t fall in that good credit range, there are ways to improve!

Credit scores, such as the FICO score, serve as a financial cheat sheet of sorts. They make the loan approval process unbiased, much to the benefit of hopeful borrowers. Now a person is represented by their repayment history and economic activity. 

How Is Information for Your Credit Score Reported?

Credit scores are based on your financial decisions. Any time you inquire for a new loan or pay a bill, your actions are reported by lenders to the credit bureaus. 

There are three bureaus that collect your financial information in the US:

Credit reports are available to you and the financial institutions with whom you apply for funding. Your financial activity is kept in credit reports for a specified amount of time. It’s essential to keep in mind that specific financial behavior can continue to negatively impact your life several years from now. For example, late payments and civil judgments stay on your credit report for seven years. 

The longest penalty is ten years, which occurs to people who file for Chapter 7 bankruptcy. However, not all activity is harmful. If you open a loan account and then decide to close it on your own, that information is also retained for ten years. 

How Is a Credit Score Determined? 

It may be possible for a borrower to achieve a perfect credit score of 850, but how can someone work to increase their credit score?

The good news is that if you want to increase your current credit score, it may only take 30 days to raise your credit score as much as 100 points. So, it will take some time to improve your score, but it is possible. Credit scores are not randomly generated. This means you can quickly and easily learn the steps you need to take to appear more financially responsible to lenders. 

When you want to apply for quick cash loans, fixed rate loans, or other installment loans, you can do so confidently, knowing you’ll get approved with your newly raised credit score. 

A credit score is determined through the calculation of five categories:

Credit FactorWeight)
Payment History35%
Total Debt30%
Length of Credit History15%
New Credit Inquiries10%
Credit Mix10%

As you can see, each category makes up a small percentage of your total credit score. 

Payment History 

The financial category that affects your credit score the most is payment history. If you pay your bills late, your credit score could drop significantly, and that missed payment can stay on your credit report for seven years. 

A simple step you can take to avoid missed payments is to sign up for automatic payments. Your bill amount is deducted right from your bank account for convenience. There are a lot of financial institutions and businesses that offer automatic payments, such as utility companies.

Total Debt Amount

The amount of personal debt can hurt or help credit scores. This category focuses on your debt-to-credit ratio. If you have a credit card with a spending limit of $5,000 that has a balance of $4,000, your credit utilization ratio would be very high.

Ideally, your debt should not exceed 30% of your available credit. If you can afford to do so, pay more than the minimum on your credit card bills. Learning how to control your spending can significantly help you get a higher credit limit

Length of Credit History

The length of your credit history is the only credit score category you cannot actively change. The older your financial accounts are, the better your credit score looks. Even if you don’t use them, leaving accounts open can help you get a perfect credit score. But keep in mind that lenders often close unused accounts, so read your loan contract carefully. If necessary, make small purchases that you can quickly pay off that same month. 

New Credit Inquiries 

The highest credit score can be achieved by avoiding new inquiries. If you need a loan to take care of a financial dilemma, keep in mind that your credit score may get lower due to a hard credit check. Whenever a person applies for a loan or credit card, their credit score decreases. Also, pulling up your credit report often for hard credit checks can make you look financially uncertain.

Credit Mix

Using different types of credit can positively help you get the highest credit score. If you maintain a credit limit and a mix of other loans, such as student loans, you could get the highest credit score! Being able to handle multiple financial responsibilities makes you look more appealing to lenders. 

What Are the Credit Score Ranges?

Now that you know how a credit score is calculated, you can get started working towards getting a perfect credit score. But is a perfect credit score necessary to get approved for loans?

Just as there are five factors for credit score calculation, there are five ranges (this uses the FICO score credit scoring model, which is the most commonly used):

  • Poor: 300-579
  • Fair: 580-669
  • Good Credit Score: 670-739
  • Very Good: 740-799
  • Excellent Credit score: 800-850

You may think that having the highest credit score possible is the best course of action, but it may not be necessary. The highest credit score possible is 850, but it can be very tough to do so, and having a good credit score can be satisfactory for most lenders and financial institutions.

What Are the Benefits of a Perfect Credit Score?

Most lenders offer approval for scores that are deemed good, so anything above 670 is viewed favorably. So then you may ask, “What is the point of trying to get a perfect credit score?” 

The benefit of perfect credit scores is that you may be offered better terms and more financial opportunities. 

The higher your credit score is, the lower your interest rates may be! Interest fees are the cost you pay for borrowing money. Lower interest rates mean lower fees, so you can save more than borrowers with higher interest rates. 

You may also get offered more available credit. When someone with bad credit applies for funding, that person may not qualify for more than a few hundred dollars. Lenders are not often willing to lend a significant amount of money to people who display financial instability. But with a perfect credit score, you can probably get as much money as you need right when you need it!

If you are financially stable, lenders won’t feel inclined to offset the lending risk. They know you are likely to pay on time, so they offer incentives to try to keep you as a customer. 


What happens if my credit score drops below 300?

While the FICO score range starts at 300, scores below this are typically not assigned. A score nearing 300 indicates severe credit issues and may make it challenging to secure loans or credit.

How often should I review my credit reports for inaccuracies?

It’s advisable to review your credit report from each bureau at least annually. This ensures that all information is accurate and helps in early detection of identity theft or fraud. You can get your free credit score and credit reports online.

Do all lenders use the same credit score range classifications (e.g., Poor, Fair, Good)?

While the classifications provided are standard for a FICO score, different lenders or credit scoring models might have slightly varied classifications or ranges. FICO scores, as mentioned above, are the most used credit scoring model.

Is it possible for my credit score to vary between the three major bureaus?

Yes, since lenders might report to one or two bureaus and not all three, there can be slight variations in the scores across Equifax, Experian, and TransUnion.

If I’m denied a loan due to my credit score/FICO score, what steps should I take next?

If denied credit, you’re entitled to a free copy of your credit report. Review it for inaccuracies, understand the factors affecting your score, and work on improving them. It’s also helpful to discuss with the lender to understand the specific reasons for denial.

Can closing old or inactive credit accounts boost my credit score?

Closing old accounts can shorten your credit history length, which might negatively impact your score. It’s essential to consider the implications before closing any credit account.

How does credit card balances and credit utilization impact FICO scores?

Credit utilization, which refers to the ratio of your credit card balances to your credit limits, plays a significant role in FICO scores. High credit usage, especially when nearing or exceeding your credit limits, can negatively impact your score. Maintaining a credit utilization rate below 30% is generally recommended for a good credit score.

If I have multiple credit accounts, how can I monitor my credit scoring without incurring costs?

Many financial institutions and credit card companies offer a free score service to their customers, allowing them to monitor their FICO or other credit scores regularly. Additionally, U.S. consumers are entitled to one free credit report annually from each of the three major credit bureaus, which can help in understanding factors affecting their credit scoring.

The Bottom Line With CreditNinja

Getting to a perfect credit score is possible, but it is extremely challenging, and so most people who do try to get there, can expect an excellent or good credit score. Having an excellent, good, or perfect score can really open up financial opportunities and lower the cost of borrowing money. 

If you don’t have the best credit, CreditNinja wants you to know that there are ways to improve. There are simple ways to bring up a credit score, such as paying your bills on time. You can also take a more aggressive approach by talking to a credit counselor or professional for a complete overhaul of your finances.


  1. What Percentage of Americans Have a Perfect FICO® Score? | Nasdaq
  2. What Does The Rest of 2023 Have in Store for U.S. Credit Risk and FICO Score Trends | FICO
  3. People with perfect credit scores have 3 key traits in common, Experian reports | CNBC
  4. FICO Score History | FICO
  5. How Long Can Negative Items Stay on Your Credit Report? | Experian
  6. What is a Credit Score? | Equifax

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