An 802 credit score is usually seen as great, even excellent. This kind of credit score becomes a bridge to a consumer and amazing financial products in the market instead of a roadblock that prevents them from applying for these products. This is because a high credit score, such as 802, can give a consumer access to premium rewards in credit cards, mortgages, and loans with the best terms, and even a good standing with any loan providers.
What It Means to Have an 802 Credit Score
The average credit score is 714, making a score like 802 exceptional. However, approval isn’t guaranteed, as lenders assess other factors beyond credit score to determine a consumer’s creditworthiness.
An 802 credit score makes a borrower more attractive to lenders because they pose less risk when defaulting. The more trustworthy a consumer is to them, the more willing they will be to bet with things like down payments, repayments, security deposits, and even low credit limits.
Of course, as mentioned earlier, having a great credit score of 802 is not enough. They will also examine factors like income, employment status, credit report, etc.
How to Get an 802 Credit Score
There’s no one path that a consumer can follow to get an 802 credit score, but there are some key factors that they need to consider to achieve this goal. Also, it’s important to know that these factors still need to be looked at closely, even if they already have an 802 credit score, especially if they want to maintain it or have an even better credit score.
Credit Utilization Rate
The credit utilization rate is calculated by dividing the amount of credit a consumer uses by their available overall credit limit. It’s generally recommended to keep credit utilization under 30%, but the lower, the better.
A consumer can do this with a high credit limit and low credit balances. If a consumer is in a hurry to lower it, they can ask their lender to increase their credit limit. However, they need to have a good standing with them for approval and doing so results in a hard inquiry.
Payment History
A consumer’s payment history plays a crucial role in their credit health and is one of the primary factors lenders consider when evaluating a loan application. This is because timely repayment is key to ensuring the borrower can meet their obligations. Lenders want to see a reliable track record of payments to assess the borrower’s ability to manage debt.
If a consumer has a history of missed or late payments, it signals to lenders that they may struggle to make future payments, which significantly lowers their chances of approval. To avoid this, consumers can set up automatic loan repayments through their bank. By doing so, the bank can process payments on time using funds from the consumer’s account, ensuring they never miss a payment and helping maintain a positive payment history.
Credit Mix
Another way to increase the credit score desired by the consumer is to have a healthy mix of credit. The more diverse a consumer’s credit is, the better. This is because lenders and credit bureaus usually see this as a consumer having a lot of experience handling different kinds of credit, such as credit cards, loans, mortgages, etc.
However, it is not recommended for consumers to get a lot of different credit just to build their credit scores. This is especially true if it will cost them a lot of money. It’s also important to note that applying for a new loan can result in a hard inquiry on your credit report, which can negatively impact your score.
Age of Credit History
Consumers should also consider the age of their credit history, or how long their active accounts have been open. Canceling a credit card can shorten credit history and lower the overall credit limit, which may increase credit utilization.
That said, consumers should also remember that the lender might close any open account that has not been used for a long time. To avoid this, consumers should have at least a minimal purchase on each account to keep them from being closed.
Next Steps
Maintaining an 802 credit score is a responsibility, not a one-time achievement. It’s crucial for loan and credit card approvals and requires regular monitoring. Identity theft or errors can hurt scores, so consumers should check free credit reports from bureaus like Credit Karma, TransUnion, and Equifax.