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Here’s Why Attaining Perfect Credit Is Almost Impossible

A man sitting in an armchair and typing into his laptop while holding a credit card in one hand.

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There was actually a point in my life — during my mid-20s — when I had perfect credit. The reason is that I’d always paid my bills on time, I paid off my credit cards every month in full, and I had a long-standing credit card account in my name because my parents had added me as an authorized user when I started college (even though I didn’t actually make charges on that account).

But it’s been a really long time since my credit score was perfect. And I’m totally okay with the fact that it’s not perfect, since that’s really hard to achieve.

Why so few people have perfect credit

An estimated 1.31% of Americans have a perfect 850 credit score. But the reason my and so many people’s credit isn’t perfect is because sometimes, even a seemingly innocent move can cause your score to drop ever so slightly.

There are five main factors that go into calculating your credit score:

  • Payment history, which speaks to whether you’re timely with bills versus whether you’re late or delinquent.
  • Credit utilization, which measures how much of your revolving credit you’re using at once.
  • Length of credit history, which considers how long you’ve had accounts in good standing.
  • Credit mix, which factors in the different types of credit accounts you have.
  • New credit accounts, which refers to recently opened accounts or recent hard inquiries resulting from new credit applications.

It’s the latter item — new credit accounts — that often causes perfect credit to be out of reach for otherwise financially savvy consumers.

See, any time you apply for a new loan or credit card, the lender or credit card company does a hard inquiry on your credit report. It’s the company’s way of checking up on your finances to make sure you’re trustworthy enough to borrow money.

But every time there’s a hard inquiry on your credit report, your score tends to fall by a few points. So let’s say you have a credit score of 847 because you’ve done a great job of paying bills on time, keeping your credit card balances low, and maintaining long-standing accounts. Let’s say you also have what’s typically deemed a “healthy” credit mix — say, a combination of both installment loans and credit card balances.

That perfect 850 might seem like it’s almost yours. But if you apply for a new credit card, your score might drop from an 847 to an 842 simply because you’ve asked for more credit, putting perfect credit further out of reach. But it’s not as if you’ve done something unreasonable in that situation — you simply tried to take advantage of a good credit card offer.

Don’t sweat it if your credit score isn’t perfect

You could use up a lot of energy trying to attain perfect credit. But don’t.

Honestly, once your score reaches a certain point, the exact number doesn’t matter. If you’re applying for a loan or credit card with a score of 825, you’re pretty much just as likely to get approved with that score as with a perfect 850. So if getting to the point of perfect credit requires you to not apply for any new credit cards or loans for an extended period of time, and that doesn’t work for you financially, why put yourself through the hassle?

Rather than focusing on perfect credit, focus on maintaining great credit or building your credit if you feel it could use work. But continuously pushing for that 850 might mean setting yourself up for frustration and failure.

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