3 Things People With Perfect Credit Have in Common

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FICO has the most commonly used credit scoring method, with scores that range from a low of 300 to a high of 850. If your FICO® Score is a 300, you'll probably have a tough time getting a loan or credit card application approved. But with perfect credit, lenders and credit card issuers may be more than happy to have you on board.

Experian reports that only 1.54% of consumers have a perfect 850 credit score. Here's what people with perfect credit tend to have in common.

1. They pay their bills on time

Of the factors that go into your credit score, your payment history carries more weight than any other. Paying bills on time is crucial to maintaining strong and/or perfect credit.

If you're juggling multiple credit card balances, consolidating your debt could make it easier to manage. That could help you avoid accidental late payments that damage your credit score. You can consolidate your debt with a balance transfer card , or with a personal or home equity loan.

2. They maintain low credit card balances

Making your minimum credit card payments on time isn't enough to keep your credit score in great shape. You also have to make a point to keep your total balances low relative to your credit limit.

People with perfect credit tend to have low utilization, which is a fancy way of saying "you're using this much of your credit limit." Generally, utilization of 30% or below is good for your credit score, while going beyond that threshold can start to cause problems.

So if you have a $10,000 spending limit across your different credit cards, making sure your total credit card balance doesn't exceed $3,000 could help your score. The closer to $0 you're able to get, the better.

3. They check their credit reports

Checking your credit report is something you can do in five minutes or less. And while you're entitled to a free copy every week, it's not necessary to check that often. But it is a good idea to review your credit report from each of the three bureaus -- Experian, Equifax, and TransUnion -- every three months or so.

Your credit report is a summary of your borrowing history. It lists your open accounts, their age, their balances, and how timely your payments are. It also includes a section on hard inquiries, which occur when you apply for credit.

Credit reports can contain mistakes, so reviewing yours and correcting errors could lead to a better credit score. Plus, it's helpful to make sure you recognize every open account on your credit report. Seeing a lender you don't recognize could alert you to fraud.

You don't need perfect credit, but boosting your score helps

Getting your credit score to 850 isn't easy. And frankly, it isn't even necessary. Once your credit score gets to about 800, it almost doesn't matter whether it's an 810, 820, or 845. At that point, you're likely to have a pretty easy time borrowing money and snagging competitive rates on loans.

But if you have a credit score in the 600s or 700s, it helps to boost it. You can do so by mimicking the habits of folks with perfect credit -- and incorporating them into your financial routine.

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