820 credit score: What it means

If you have a credit score of 820, that means you have an exceptional credit score according to Experian. According to a report by FICO, only 23% of the scorable population has a credit score of 820 or above. Having a high credit score puts you in an elite group of people with great financial standing. This can help you in many aspects of your life, from getting approved for loans to getting lower interest rates. So if you have a high credit score, make sure to take advantage of it!

Let’s get started to understand what it means, why 820 credit score helps and how to get one.

There are a number of advantages that come with having excellent credit score, and the good news is that you don’t need to have a perfect 850 credit score to start enjoying them. Just getting your credit score over 820, which is officially considered excellent, gives you the same benefits that come with having a perfect credit score.

When you have an 820 credit score, you’ve done everything you need to do to prove that you are a responsible borrower. Banks and credit card issuers will be eager to loan you money, often at very favorable terms. People with 800+ credit score rarely hear the word “no,” whether they’re asking for a mortgage preapproval letter or turning in a rental application.

How to improve your credit score

If your FICO® Score is 820, that means it's well above the average credit score of 711. In fact, it's nearly as good as credit scores can get. However, you may still be able to improve it a bit.

More importantly, your score is on the low end of the Exceptional range and fairly close to the Very Good credit score range (740-799). A Very Good score is hardly caused for alarm, but staying in the Exceptional range can mean better chances of approval on the very best credit offers. So it's worth trying to improve your score even if it's already excellent.

Keeping your credit card utilization rates at or below 30% is one of the best ways to avoid lowering your credit score. This applies to all accounts in total and to each individual account. If you can keep your utilization rates below 30%, you'll be in good shape and avoid any potential negative impacts on your credit score.

Length of credit history accounts for up to 15% of your credit score. If all other factors stay the same, a longer credit history will result in a higher score than a shorter one. Therefore, it's important to maintain a good credit history if you want to have a high credit score.

Although new credit accounts may have negative effects on your credit score in the short term, don't be discouraged from applying for new credit or taking on additional debt. Credit-scoring systems flag you as being at greater risk of being able to pay your bills when you do either of these things, which causes your credit score to drop a small amount. However, as long as you keep up with all your payments, your credit score will rebound within a few months. New credit activity can actually contribute up to 10% of your overall credit score.

820 Credit Score: What does it mean to have it?

An 820 FICO score is excellent and indicates a very positive credit history. There are no missed payments or credit utilization issues dragging down your score from its exceptional ranking. You've likely been using credit successfully for many years and have a healthy mix of credit accounts that includes both revolving credit (like credit cards) and installment credit (like a mortgage).

This is why you should be happy with your exceptional credit score

If you have a credit score in the Exceptional range, it means you have a long history of managing your credit responsibly. Your record of on-time bill payments and prudent handling of debt is essentially flawless.

Banks and credit card issuers love customers like you who have Exceptional credit scores. They usually offer borrowers like you, their best lending terms. This may include opportunities to refinance older loans at better rates than you were able to get in years past, and excellent odds of approval for credit cards with premium rewards programs and the lowest-available interest rates.

What does a 820 credit score get you?

Credit Cards For 820 Credit Score

The benefits of exceptional credit score

Higher credit limits

If you have an 820 credit score, you'll likely have access to higher credit limits. This not only increases your purchasing power but also makes it easier to maintain a low credit utilization ratio - which is key to maintaining a near-perfect credit score. Higher credit limits are a great way to keep your credit utilization low and your credit score high.

Better credit offers

If you have an 820 credit score, you'll have access to the best credit offers available. With such a high credit score, you'll be an ideal candidate for all the best credit cards on the market, including cards specifically for people with excellent credit.

People with a credit score over 820 are also likely to be accepted for other lines of credit, including personal loans, mortgages, and car loans. Not only will most banks and credit issuers be eager to loan money to someone with a near-perfect credit score, but the terms of the loan will often be more favorable than what's offered to people with lower credit scores.

Better credit approval odds

It may be comforting to know that your 820 credit score likely exceeds any lender's minimum credit score requirements, no matter what type of credit you are applying for. As long as you meet other eligibility requirements, like income and employment stability, your odds of approval are high.

Lower interest rates

If you have an excellent credit score, you may be eligible for lower interest rates on loans and credit cards. This can save you a lot of money over time, as you will pay less in interest charges. For example, if you have a 30-year mortgage with a low fixed interest rate, the savings can be substantial. So if you're looking to save money, maintaining a high credit score is a good place to start.

Better insurance rates

If your state allows it, your insurance provider will take your credit score into account when calculating your premium. Having a good credit score could help you get a lower rate on your homeowners or auto insurance. So if you have a near-perfect credit score, make sure to take advantage of it and shop around for the best rates.

How to get an 820 Credit Score

One of the best ways to show lenders that you're a responsible borrower is to pay your bills on time. Payment history is the most crucial factor with the FICO credit scoring models, accounting for 35% of your credit Score. So, it's essential you pay your bills on time.

Fortunately, if you fail to pay a bill by its due date, you can correct the mistake and stave off negative consequences to your credit score. Typically, lenders don't report missed payments to the credit bureaus until they're 30 days past due. So, make sure to pay any outstanding bills before then.

Adding a new credit account to your portfolio can be beneficial, especially if it's a type of credit you don't already have. For example, if you only have installment loans, like a car loan or a personal loan, adding a new credit card can help diversify your credit mix, which determines 10% of your credit score. Additionally, by increasing your overall credit limit, you may also reduce your credit utilization ratio.

Monitoring your credit score regularly is a smart way to stay on top of your credit health. Many credit monitoring services offer weekly updates on your score, along with an analysis of factors that might have caused any changes. By understanding what affects your credit score, you can make choices that will help to raise it. Avoid anything that might have a negative impact on your score, and you'll be on your way to maintaining a good credit history.

If you want to avoid harming your credit score, it's important to keep your credit utilization ratio under 30%.

It's a good idea to review your credit reports with the three credit bureaus (Equifax, Experian, and TransUnion). Believe it or not, millions of Americans have errors on their credit reports—and those errors could inadvertently lower your credit score.

Make sure all the information on your credit reports is accurate and learn how to dispute credit report errors with the credit bureaus. This way, you can make sure your credit score is as high as it should be.