Have an 'exceptional' credit score of 800 or higher? Here's how to maintain it, expert says

"There's some element of the bigger [credit scores] are, the harder they fall."


An "exceptional" credit score, which FICO defines as 800 to 850, comes with some added pressure. "There's some element of the bigger [credit scores] are, the harder they fall," says Ted Rossman, senior analyst at CreditCards.com.

"It may surprise people that you could have an 800 credit score, pay one bill 30 days late, and possibly lose 100 points," he explains. "Whereas if you're in the 600s and you pay a bill 30 days late, it's not going to hurt you as much because there are already other things dragging you down. It's sort of like grading on a curve."

It's worth noting that aiming for perfection isn't necessary, Rossman says: "Generally, lenders will give the best terms to people in the mid-700s and above," meaning the best rate on a credit card, auto loan, mortgage, or other loans and lines of credit.

If you happen to have an exceptional score of 800 or higher, and you want to maintain it, "you really do need to be on your best behavior each and every time," Rossman says. Here's how.

Even 'one late payment' can be 'a big red flag'

In order to maintain a high credit score, you must pay your bills in full and on time each month, Rossman says. A credit score "is your financial report card. This is the likelihood that you're going to pay [a lender] back."

For lenders, payment history is the most important indicator. "So you may think, 'Once in a while, it's not that bad to pay late.' It is bad to pay late," he says.

"When FICO puts these scores together, really what they're trying to do is to rank order consumers. So even that one late payment, that's going to be a big red flag to them and drop you into a lower tier," Rossman says. "It may not sound like much, but that can be really significant."

A late payment is not something that's easy to recover from. In fact, it can stay on your report for up to seven years.

Keep your credit utilization below 10%

Another important factor is your credit utilization rate, which is the amount of credit you are using divided by the credit limit. It accounts for 30% of your credit score, based on the FICO model.

"People with the best credit scores tend to keep that ratio below 10%," Rossman says.

It's a common misconception that paying your bill in full and on time each month is enough to maintain an exceptional credit score, Rossman says. Let's say you make $4,000 of charges throughout the month and you have a $5,000 credit limit. Even if you pay in full and avoid interest, your score would still take a hit because you would be using 80% of your available credit.

While a late payment can cause long-term damage to your credit score, credit utilization is easy to repair quickly. "The fix is to make an extra payment in the middle of the month, knock that balance down before the statement even comes out," Rossman says.

"I often suggest maybe paying every two weeks on payday. It helps with this [credit utilization] ratio low."

Avoid opening too many new accounts

The average age of your accounts is also something credit bureaus take into consideration when calculating your credit score.

Every time you apply for a new line of credit, the lender will take a look at your credit score and that inquiry can lower your credit score, according to FICO. The number of points deducted varies based on the type of inquiry.

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If you have an exceptional credit score, "you want to avoid making too many credit applications all at once," Rossman says.

Opening up a new line of credit can stay on your report for up to two years, "so I would try to keep it below five [applications] in a two-year span," he says. "It's obviously fine to apply for products once in a while, but maybe try to spread them out every six months or so. You don't want to run up too many all at once."

New account openings will alter the average age of your accounts. The older your credit history, the better your score is, since it shows your ability to pay consistently over time, Rossman says.

Remember, though, don't get hung up on perfection, Rossman says. A score between 740-760 is really all you need: "I think as far as lenders are concerned, anything above that is just bragging rights."

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