It's the "white whale" of personal finance — the perfect credit score.
Get there, by reaching the ever-elusive 850 FICO score, and the world is yours. You'll enjoy the best interest rates, the choicest insurance options, the most flexibility in negotiating your debts and repayment plans.
At least that's the fantasy.
The reality is that a "perfect" score isn't really even possible, according to Rod Griffin, Experian's director of public education.
"I've personally never met someone with a perfect score," Griffin says, "and it's simply because there's always some level of risk. When you use credit there's always some risk that you won't be able to repay that debt. You may become ill or be in an accident. It's like driving a car; there's always a chance that you could be in an accident due to no fault of your own."
As a result, he says, perfect credit shouldn't be the goal. (Even defining perfection can be tricky, as each of the national credit bureaus calculates scores slightly differently, with maximums that range from 850 to 990.) But achieving an extremely high credit score — generally considered anything north of 800 points — is very much possible for everyday Americans, Griffin says, and can come with some great benefits in terms of lower interest rates and more flexible financing terms.
"Typically, the higher the score, the more favorable the interest rate," explains Heather Battison, senior director at TransUnion, who says it is in fact technically possible to achieve a perfect credit score based on her company's system. "So it is in the consumer's best interest to aim for the highest score possible."
It's all about perception.
"Lenders aren't looking for perfect scores," Griffin says. "They're looking for good lending risk, that you can manage your credit well."
We reached out to members of our Yahoo! Contributor Network who have credit scores of 800 and above to find out how they got there and how they maintain their stellar credit. A selection of their responses is below.
Name: Eric Holden
Hometown: Westbury, N.Y.
Credit Score: 825
"Instead of making one large monthly payment, like most credit card holders, I pay off my credit card once every four or five days. This helps me pay my bills on time, which in turn, raises my credit score. By making a payment once every few days instead of once a month, it reduces the overall debt on my credit report.
"I also use my credit card very often, and I never hesitate to charge very small purchases. Even when I pick up my daily coffee I pay with credit instead of cash. It may sound silly to use your credit card for purchases of less than $2, but it's a quick and easy way to build up your credit score."
Name: Jess Heid
Hometown: Baton Rouge, La.
Credit Score: 800
"I used to pay late because I would forget. Now I schedule automatic payments so I know the bills will get paid. And what I make and spend immediately affects what's left to pay my debts. I track my spending and use that information to build a budget, so I know how much money I have and am rarely caught short."
Name: Nancy Miller
Hometown: Columbia, Md.
Credit Report: 815
"From car payments, to mortgage payments and credit cards -- my credit history goes back 33 years. This year, I opened two new credit card accounts -- with Sears to save money on a major appliance purchase and with Chase to earn frequent flyer miles -- but most of our accounts go back many, many years, which helps our score."
Name: Rachael Moshman
Hometown: Vero Beach, Fla.
Credit Score: 800
"I started out thinking that I was doing the right thing by paying cash for everything. But then I tried to buy a house. I had a job, could afford the monthly payments and had a 20% down payment, but I was turned down for loan after loan because my credit score was effectively zero. I found out that having no credit was almost as bad as having bad credit.
"I got a card and started very carefully using my Visa for nearly everything. Sears was the first company to give me credit, so I bought something small there every month and paid the bill in full when the statement came. Eventually my score began to rise."
Name: Morris Armstong
Hometown: Danbury, Conn.
Credit Score: 800-plus
"I have had credit cards for over 40 years, and while a credit history usually focuses on events within the past seven to 10 years, the age of an individual credit account is important, and I am fortunate that some of my credit accounts have 20- to 30-year histories. It is important to understand that the age of an account is a major component of a credit score and that you should try and keep your old accounts open and occasionally use them."
Name: Angela Colley
Hometown: New Orleans, La.
Credit Score: 811
"I bumped my credit score up by over 100 points just by ordering my credit reports and writing a few letters. All three of my credit reports contained at least one error each. For example, one company was reporting a debt outstanding that had been paid off several months before. Another credit report showed an account I didn't even own. I wrote letters to the credit bureaus disputing these errors, the credit bureaus investigated and removed the errors about 30 days later."