KEY POINTS
A mere 1.5% of American consumers have managed to attain the ideal 850 FICO® Score.
The exact formula for calculating FICO scores remains undisclosed, so pinpointing the precise actions needed to achieve a perfect score is not possible.
Typically, a score of around 780 or higher is sufficient to secure the most favorable interest rates on loans.
One might assume that by consistently paying bills on time, maintaining low credit card balances, and only opening new credit accounts when necessary, a perfect credit score would be within reach. Unfortunately, this isn’t entirely true. Although such practices are likely to result in a very good credit score, reaching a perfect score is unexpectedly challenging.
The FICO credit scoring system generates scores ranging from 300 to 850. Yet, according to recent data from leading credit bureau Experian, only slightly over 1.5% of U.S. consumers achieve a flawless 850 score.
Why is attaining a perfect credit score so challenging?
In short, reaching the coveted 850 requires a “perfect storm” of data on your credit report. Since the FICO formula is a well-kept secret, the specifics of this data remain unknown.
What we do know are the five primary categories of credit scoring information and their respective weights:
– Payment history (35% of FICO® Score): Timely bill payments and avoiding collections or negative actions.
– Amounts owed (30%): Keeping balances low relative to credit limits and initial loan amounts.
– Length of credit history (15%): Factors related to time, including the age of your oldest credit account, the ages of individual accounts, and the average age of all credit accounts.
– New credit (10%): Newly opened accounts and recent credit applications.
– Credit mix (10%): The variety of credit account types appearing on your credit report.
Simply understanding these categories can be enough to push your score into the “exceptional” range. For instance, knowing that “amounts owed” is a critical factor can motivate you to keep credit balances significantly lower than your credit card limits.
However, the exact credit utilization, in conjunction with all other factors, necessary to achieve a perfect score remains unknown, which explains its rarity.
Habits of People with Perfect FICO® Scores
Certain traits of individuals with perfect credit scores might not surprise you. For instance, the average person with an 850 FICO® Score has never had a delinquent credit account.
On the flip side, some statistics might catch you off guard:
The typical person with an 850 FICO® Score carries over $3,000 in credit card debt across approximately six active credit card accounts. Yet, this only accounts for about 4% of their total available credit.
In addition to nearly six standard credit cards, the average consumer with a perfect score has about four retail (store) credit cards open.
The average person with an 850 FICO® Score holds nearly $246,000 in mortgage debt, $19,296 in auto loans, and owes $17,545 on other loans.
Individuals with perfect scores generally have extensive credit histories. Baby boomers and Generation X members (those roughly 44 years old and older) constitute 92% of those with perfect scores.
The main insights are that people with perfect scores keep their debts low, consistently pay bills on time, and actively use their credit through both installment loans and credit cards.
Here’s the Good News
Aside from the satisfaction of reaching it, there is no significant practical benefit to pursuing a perfect 850 score. In fact, with a score exceeding 780, you should qualify for the lowest interest rates and the most attractive credit offers lenders provide.
To give yourself a buffer (since applying for credit can temporarily decrease your score), aiming for around 800 could be a worthwhile goal—and it’s much more attainable, as over 20% of U.S. consumers fall within this range.
