Is Being in the 800 Credit Score Club Really That Important?
The ‘800 Credit Score Club’ is a term coined to describe those that have a credit score of 800 or higher, as the name implies. Those who regularly monitor their credit score know how difficult it is to achieve a score this high. In fact, membership to the 800 Credit Score Club is so exclusive that roughly less than 1 in 6 people have a score high enough to be in the club. Furthermore, having a credit score between 800 to 900 is the highest credit score range and is considered to be perfect credit.
This is why all Canadians need to be monitoring their credit score.
Generally, the higher your credit score is, the better offers you will get in terms of your personal finances thereby saving you thousands of dollars over the course of your lifetime. However, given how difficult it is to get a credit score this high, is it really worthwhile to be a part of the 800 Credit Score Club?
800 Credit Score Club Benefits
Being in the top tier of credit scores definitely has its perks from credit cards to mortgages to refinancing. Let’s take a look at the exclusive benefits of being in the 800 Credit Score Club below.
- Credit Cards: With a credit score of 800 or higher, you can get approved for virtually any credit card. In addition, you will have access to no annual fees, 0% financing, no foreign fees, retail, airline and hotel benefits.
- Mortgage Rates: You will qualify for the lowest mortgage rates by being a part of the 800 Credit Score Club.
- Refinancing: You will qualify for lower interest rates when refinancing by having a credit score of 800 or higher.
- Car Loans: Access car loan offers with 0% introductory rates with credit scores of 800 or higher.
- Insurance Premiums: By being a part of the 800 Credit Score Club, you will have lower insurance premiums.
- Personal Loan Rates: More affordable rates on personal loans will be available to you by having a credit score of 800 or higher.
- Apartment Leases: It will be easy for you to get access to the apartment leases or rentals you want by being in the 800 Credit Score Club
Take a look at this infographic to learn about how your credit score is calculated.
800 Credit Score Club Member Habits
By being in the 800 Credit Score Club, you are guaranteed to have the best loans and interest rates. Although gaining access to these benefits takes a lot of work, there are several habits that members of the 800 Credit Score Club share.
- Pay on time all the time. Payment history is the most important aspect of your credit score because it accounts for 35% of the total. This means you must always pay on time, no exceptions.
- Be mindful of credit card balances. The relationship between your credit score limit and balance is factored into your credit score. The lower your credit card balances are, the better your credit score will be. Aim for a credit utilization rate of 30% or lower, remember the lower the better.
- Don’t close credit card accounts. Individuals who don’t use credit cards, but keep them open anyway, are making better use of their credit utilization rates thereby boosting their credit scores.
- Only apply for credit when absolutely necessary. When you apply for new credit, hard inquiries are increased which has an impact on your credit score. For this reason, only apply for credit as needed, a strategy is important when you’re aiming super high.
- Be realistic. Only apply for credit that you can realistically afford and avoid overspending. By doing so, you will be building a definite and lengthy credit history which is another important component of your credit score.
- Make use of various account types. Credit scoring models favour individuals who have a variety of account types. Over time, gradually add different accounts such as credit cards, auto loans, student loans, and mortgages to boost your credit score.
- Think long term. By sacrificing your immediate wants now, you’ll be able to get bigger and better wants in the future through your credit score. Also, the longer you’ve had stable credit, the better your credit score will be.
- Repeat your habits and track your progress. Consistency is crucial when it comes to credit scores, this means that you need to develop good habits, repeat them and track your progress.
- Budget. The best way to form, monitor and maintain good spending habits is through a budget. Your success in managing your finances will be reflected in your credit score.
Do you have a credit score of 450? Look here to know if you can get a loan.
How to Get a Credit Score 800 or Higher
To get a credit score of 800 or higher, you will have to adopt the habits of individuals who are already in the 800 Credit Score Club discussed above. Keep in mind that this is a serious commitment that requires dedication and patience. Taking a hard look at your financial situation and making big changes over time will absolutely be required.
Getting a credit score of 800 or higher is difficult, but not impossible. In addition to the habits discussed above, below are some pointers on how to make changes to push your credit score upwards.
- Get your financial act together as early as possible. The earlier you start working on your credit, the longer your credit history will be, which is advantageous. Good ways to start off your credit journey is getting a credit card as soon as possible (even if you will rarely use it) and budgeting. Not only will you be kick starting your credit history, but you’ll also be developing good habits right away which can be further improved over time. Watch out for these 8 mistakes that a lot of first-time credit card users make.
- Obsess over your finances. Perhaps ‘obsess’ isn’t the right word, but you definitely need to be actively involved in what happens with your personal finances. Things you can do to get more involved with your personal finances is regularly checking your credit and monitor your account balances frequently.
- Budget. The importance of evaluating your habits and bettering them over time is so crucial to your credit score success. You can’t fix what you don’t know is broken, by budgeting you can see where your money is coming from and going, then you can make appropriate changes to faulty spending habits. There is no cookie cutter solution to managing your finances because everyone’s financial situation is unique. Over time, you will get better and better at budgeting per your personal situation which is an essential component of getting into the 800 Credit Score Club.
Want to learn how to create a debt repayment plan? Click here.
Creating Debt to Get a High Credit Score
Essentially, the more debt you take on and manage effectively, the higher your credit score will be. Although, it is important to consider this fact thoroughly and proceed with caution.
Taking on debt can become somewhat addictive because you’re getting lots of material things, which can be a great feeling in the moment, but at some point, you’ll have to pay for it. While it appears that you’re building good credit, you need to be realistic in terms of what works best for you and be sure that you can afford the debt you’re taking on. If you take on too much debt, you’ll risk not being able to pay it off which will do much worse to your credit score than good. For this reason, sometimes taking on more debt isn’t worth the potential benefits to your credit score.
Read this to discover some ways of saving when you have too much debt.
There is a definite trade-off between having a good credit score and being able to pay off debt. Remember, you need to do what’s best for you, being able to repay debt is always more important than a higher credit score. If you can afford more debt and increase your credit score, then it is a win-win situation for you!
Need a few debt management tips? Look at these.
Is a Perfect Credit Score Necessary?
Being part of the 800 Credit Score Club has its perks, but it is not necessary to be successful financially by any means, as many get by without being a member. It is especially not worth the exclusive status if you take on more debt that you can’t pay off. Instead, it is best to strive towards better credit that is realistic for you.