Getting the Highest Credit Score

It is safe to say that everyone would like to have the highest credit score they can. Whats the highest credit score possible? The highest credit score possible under the current credit scoring module is an 850. The reality is that very few people have a score this high.
In the current lending environment, anything over 740 is considered an excellent credit score. Anything over 700 is considered very good. Individuals with credit scores below 620 would fall in the bad credit category.
Essentially, your credit score is a report card that gives potential creditors a metric whereby they can judge the potential risk that you represent to them. To understand how to achieve the highest credit score you can, you need to understand what makes up your credit score.
35% Payment History
The most important factor in determining your credit is how you have paid your bills in the past. Recently negative accounts will impact your score much more than older delinquencies.
30% Utilization Ratio
Your utilization ratio is the relationship between the credit that you have available to you and what you are presently using. The idea is that if you have $10,000 in credit cards available to you and are only using $1,000 of them you are obviously not financially stressed. Maxed out credit cards are a sign that you are short on funds. If you want to have the highest credit score, you should avoid carrying balances. At a minimum, try to keep the amount that you owe below 20% of the credit line that you have available to you.
15% Length of Credit History
How long you have been using credit accounts for 15% of your total credit score. The highest credit scores are enjoyed by those who have a long history of paying their bills in a timely manner.
10% New Credit
While reestablishing new credit can be an important part of a comprehensive credit restoration plan, you need to understand that opening new accounts does temporarily lower your score. This is especially true if you open a lot of accounts at one time. Likewise, inquiries by creditors will also lower your credit score.
10% Types of Credit Used
The type of credit you use accounts for 10% of your credit score. While it is good to have a mix of revolving and installment credit, you should try to stay away from finance company loans because these can lower your credit score.
By understanding what goes into your credit history, you can work to create the highest credit score possible.

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