Fact: The majority of people don’t have amazing credit. In fact, the median credit score, according to Experian, is only “good,” the average score hitting 700. But some people do blast their way into 800 territory—a tier known as “exceptional.” Although WalletHub estimates fewer than 1 in 6 people attain this feat, the small group is filled with insider knowledge that could be beneficial to many others—especially those looking to secure a mortgage or even sign a lease.
I managed to find a couple of these lucky people right in my office and, surprisingly, their stories don’t all follow the same pattern: There are tales of credit card debt, authorized users, student loans, minimum credit accounts open, and numerous conversations with the bank. What they all did though? Diligently paid the bills, kept their credit utilization rates low, and never ever closed an account. Here, four members of the 800+ club reflect on how they got there:
“I got my first credit card shortly after my 18th birthday, the credit limit was $200. I used it for gas and was paranoid about missing a payment or being late so I would always pay it way before it was due. After a few months, I called the bank to increase my credit limit (higher available credit with lower utilization = better score). As I got older, regardless if I paid the balances in full, I always paid the minimum due on time and never closed a card I wasn’t using, which has helped me gain an excellent score today! It took me about six years after really committing to maintaining my credit to get to 800, but I’m glad I did!”
“I am not happy that I have student loans, but they did help with my credit after college. For the first couple of years after college, I had about $5,000 in credit card debt for a few years that I was trying to pay down with my low salary. I finally paid it off and now that I have a higher income, I make it a point to pay all my bills (credit card, loans, utility, etc.) on time.”
“If you can afford a bill, always pay it—get a refund later. I had a hospital bill once that I was certain my insurance should have covered, and I got a warning that they were going to send it to collections if I didn’t pay it. I was trying to fight over the principle of it, and my dad told me to just pay it, $50 wasn’t worth a credit ding. Eventually, I was refunded the money, but he was right—I had the money, and this is one time when the principle of the matter just isn’t worth sacrificing your credit score.”
“Try not to close any credit cards, especially cards with a long credit history. I have an old, no-annual fee card that isn’t worth putting much spend on, but it keeps my average age of credit higher to have it open. Put a recurring expense like Netflix on the card and the set the bill to autopay every month so that the account stays open. If you have an older card with an annual fee you no longer want to pay, call the issuer and see if there’s a free version of the card you can downgrade to. That way you preserve the credit history without the cost!
Have any tried-and-true credit tips? Share in the comments!