I have a Perfect Credit Score. Here’s How I Found It.

For a few precious weeks last year, I had perfect credit.

Sometime over the summer, I clicked on one of those credit review links, logged in and saw the magic digits: 850.

I had never had perfect credit before, and I may never have it again. After a month or two, my score was back in the 820 range: different, but not perfect.

Perfect credit, and “special” credit opens doors for American consumers: Low interest rates on mortgages. Better chances to rent an apartment or get a job. Lower insurance premiums.

About 1.8% of Americans have a perfect FICO score, the Motley Fool reports. People with perfect debt tend to be older, like me. Many of them live in Minnesota.

My journey to perfect debt is remarkable, if only because I spent most of my adult life as the poster boy for perfect debt.

I entered my professional career making $17,000 a year, with five figures in student loans and no possessions more valuable than pizza coupons.

By the time I was 40, I had enough money saved for retirement. Student loans were gone. My wife and I had a house. But now I had five figures in credit card debt. The balance increases every year.

I finally gave up the credit card habit. I spent my fifth decade paying the cards down. My credit score is steadily rising.

In 2022, I started writing about personal finance. I practiced what I preached: Save more, borrow less and transfer the rest of my debt to interest-free credit cards. (Yes: Credit cards can help you, too.)

I remember the day my credit score hit 777. The rest of my journey to total debt came in baby steps. To recap, I’ll break down the components of a credit score.

There are many credit scores. For simplicity, I will focus on the standard FICO Score.

Payment History: 35%

The most important factor in your credit score is “as simple as paying your bills on time, and as agreed,” says Jenelle Dito, vice president of consumer empowerment programs and partnerships at FICO.

Missing a payment by even a day or two can result in late fees and other negatives.

But a late payment “usually doesn’t get reported to the credit bureaus until 30 days later,” says Courtney Alev, a consumer finance attorney at Intuit Credit Karma.

When that happens, it’s a big deal.

“The reality is if one misses a payment, one late payment can lower your credit score significantly,” Alev said.

If you miss a payment, “you still want to pay it off quickly,” says Alev. If a payment goes from 30 days to 60 or 90 days late, your credit score can drop accordingly.

The easiest way to avoid missed payments is to add them to automatic payments. Another option is to set up alerts and reminders. Usually, you can do all those things on the website where you pay the bill.

For me, keeping up with debt has never been a big problem. However, in recent years, I have moved my small debts to pay them off.

I’m afraid to make big ones, because of the checking balance in my checking account. Instead, I list all my bills for the month in a Google Drive file and mark them when they’re paid: crude but functional.

Amounts Due: 30%

This is the second largest factor in the credit score. Measure your credit utilization: The amount of your available credit that you are using.

If you have $100,000 of available credit on your cards and lines of credit, and you have a combined balance of $50,000 on those accounts, you are using 50% of your credit.

You’ll often hear that a good goal is to keep your credit utilization below 30%.

“But the truth is, if you want to have perfect credit, you’ll want to have less than 10%, or less than 5,” said Alev.

Dito, of FICO, says 30% can be a useful goal to encourage, but the number has no special meaning in the credit-score universe.

“Nothing amazing happens at 30%,” he said. “The direction we’re trying to give is, the lower the better.”

There are several ways to lower your credit utilization. Another is to pay off your lines of credit.

Some are less obvious. Example: When you pay off a credit card, you may be tempted to close it. But if you keep it open, that unused credit can boost your score. (And your credit history: See below.)

As I pay off my lines of credit, my credit score skyrockets. A few years ago, I started keeping old credit cards open.

To keep the account open, it helps to make periodic payments. I have three now, each including a different monthly subscription, all set to auto-pay.

Length of Credit History: 15%

This FICO thing is self-explanatory. Credit agencies reward you with a credit worthiness history.

“The earlier you start appearing on the credit bureau’s website, the better,” says Cynthia Chen, CEO of Kikoff, a company that helps consumers build credit.

It may seem counterintuitive, but you don’t start life with perfect credit. To get it, you need a credit history. The program “favors people who start building credit early,” Chen said.

It also likes the old. That’s one of the reasons I have good credit.

New Credit: 10%

This part of FICO is mostly negative. Every time you take out a new car loan or credit card, you get new debt.

A new account here or there is no big deal. But “if you’ve just opened a bunch of credit cards, that can be seen as a yellow flag to lenders,” Alev said.

With new credit, time is of the essence.

“Let’s say you were planning to buy a house in the next few months,” says Sara Rathner, credit card expert at NerdWallet. “You’ll probably want to hold off on applying for new credit cards.”

If you apply for new credit and the creditor pulls your file, that’s a “hard inquiry.” It can lower your credit score – and your ability to qualify for that loan.

My mantra today is “don’t borrow.” And, except for the car loan in 2021, I’ve lived with it. I open new zero interest cards every few years, but only to pay off the debt I already owe.

Credit Mix: 10%

This metric looks at your ability to manage different types of credit.

A credit card is considered “revolving” debt, allowing you to borrow, repay and borrow again. A mortgage is an “installment” loan, a fixed sum paid in regular payments over a set period of time.

It’s good to have both.

How Do I Get a Perfect Credit Score?

Looking back on my credit journey, I can clearly see my perfect credit path.

Currently my score is up to 850, I have had a solid payment history. My credit utilization was as low as it has ever been. My credit history was long and getting longer. I wasn’t taking out new credit, and my credit mix includes both installment and revolving loans.

How did I lose my total credit?

It’s hard to say that. Credit scores fluctuate. And the credit gods may have punished me for doing the right thing.

At the time my credit score was flirting with eligibility, I opened a new no-interest credit card and loaded it with debt from the old home loan. That move saved me hundreds of dollars in interest. But it was also new debt, and there was a bump in my credit utilization rate.

As I sit here today, my FICO score is 818: Not perfect, but good enough.

This article first appeared in USA TODAY: I got a perfect credit score. Here’s how I found it.

Reporting by Daniel de Visé, USA TODAY / USA TODAY

USA TODAY Network via Reuters Connect