How to Get 800 Credit Score in Your 20’s

Kat Tretina

September 25, 2018  •  3 Minute Read

Financial Tips

If you want to achieve financial success at a young age, one of the best places to start is with your credit score. Your credit affects everything from the interest rate you get on a loan to whether or not you’ll land your dream job. Taking the time now to boost your score and reach 800 or higher will help you achieve your financial goals.

However, reaching an 800 credit score is not easy. According to Experian’s State of Credit Report, only 22.3 percent of Americans had credit scores between 781 and 850. Even fewer have scores of 800 or higher.

That doesn’t mean it can’t be done, but it will take work and dedication.

Benefits of a high credit score

Having a high credit score helps you in a number of ways:

1. It’s easier to get a loan: Whether you want to buy a home or a new car, an 800 credit score ensures lenders will offer you a loan. In fact, you’ll likely have many different lenders competing for your business, giving you more buying power.

2. You’ll get a lower-interest rate loan: Because lenders will be fighting to win you over, you’ll be able to get a far lower interest rate than if you had poor or even average credit. That can help you save thousands over the length of your loan.

3. You can qualify for the best credit cards: You’ll qualify for low-interest credit cards with valuable perks and rewards. You can skip security deposits: Many utility companies and landlords base their security deposits on your credit. With a great credit score, you might not have to put down any deposit at all, freeing up more cash for your other goals.

How to get an 800 credit score

To work toward an 800 credit score, you need to know your starting point. You can get your credit score for free, and then come up with a plan to improve it. To boost your score to the excellent level while you’re still young, follow these steps.

1. Pay all your bills on time

According to FICO — the organization behind the most commonly used credit score — paying your bills on time is the single most important factor considered when determining your score. In fact, your payment history makes up 35 percent of your score.

A single missed payment can damage your credit and slow your progress. To ensure you make all of your payments on time, set up calendar reminders, write down due dates in a paper planner, or set up automatic payments — whatever works best for you. Keep up with your bill due dates, and your credit will improve.

2. Limit your credit card balances

Your credit utilization — or how much of your available credit you use each month — is the next biggest factor in calculating your score. Creditors like to see a low credit utilization. For example, if you have a $10,000 credit lines, your score will dip if you max out your credit cards or rack up a $8,000 balance. The lower the balance, the better.

You should aim to keep your credit card spending low; if possible, pay off your balance in full each month. If you already have a high balance, focus on a debt repayment strategy to pay them down.

3. Diversify your credit

Next, work on diversifying your credit. How many types of credit you have — your credit mix — accounts for 10 percent of your score. Lenders want to see that you’re capable of juggling more than one form of debt. For example, having a store card, a credit card, and a car loan shows that you can manage multiple forms of debt while making all of your payments on time.

4. Apply for new credit carefully

Although diversifying your credit can help your credit score, you should do so carefully and slowly. Applying for too many new forms of credit too often can actually cause your credit score to decrease.

Only apply for credit when absolutely necessary. If you’re shopping around for a new loan or credit card, get quotes within a few days to minimize the damage to your score.

5. Be patient

Most of all, be patient. Your credit score won’t reach 800 overnight. It can take months or even years to reach that level. But, by following these steps and maintaining good credit habits, you can boost your credit score over time.

Using your high credit score

Once you’ve achieved your goal and reached an 800 credit score, you become part of an elite club. That score unlocks special deals and unique perks for you, especially when it comes to reward credit cards. With your new score, you can get the best offers, including cash back bonuses and airline miles.