Want a Perfect 850 Credit Score? Do These 5 Things

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I once had such bad credit that a furniture store wouldn't let me buy a sofa on credit. I spent several years slowly building up my score by paying my credit card bills on time, and eventually earned my current score of 769.

Credit scores range from 300 to 850. According to Experian, just 1.54% of American consumers have a perfect 850 score. I'm far from reaching that level, and honestly, I'm not trying to get there. But if you want to be part of that exclusive group, here's how you can achieve it.

1. Pay bills on time

Everyone knows they should pay their bills on time, but it's important to understand just how critical on-time payments are. Your payment history is the largest percentage of your FICO® Score, accounting for 35%. (The FICO® Score is the most commonly used scoring model by lenders.)

If you want a perfect credit score, you have to make all of your payments on time, every time. The average number of delinquencies for perfect-score consumers is zero . This also means you can't have any bankruptcies on your credit report or have any accounts sent to collections, which stay on your report for up to seven years, along with late payments.

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2. Keep your debts very low

Nearly just as important as your payment history is the amount of debt you owe; this is often referred to as your credit utilization, and it accounts for 30% of your FICO® Score.

You have to use none or very little of your available credit to have a perfect score. Experian says perfect score holders tend to have more credit cards than the average consumer (about six, compared to about four for most borrowers), but they have credit utilization on average of just 4%, compared to 29% for most consumers.

That means someone with a perfect score could have four credit cards, each with credit limits of $15,000 -- giving them access to $60,000 -- but they might be using only $2,400, at any given time.

3. Build a long credit history

About 15% of your credit score is determined by the length of your credit history. Longer histories give a more accurate picture of your creditworthiness to lenders, which is why keeping an old account open -- even if you've paid it off -- is generally a good idea.

People with perfect scores have long credit histories, which is why baby boomers and older generations account for 66% of people with an 850 score. In comparison, millennials and younger borrowers account for less than 8%, Experian says.

So, if you have a credit card account that's been open since you were in college, keep it open!

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4. Maintain a mix of credit

It's better for your credit score if you have a mix of credit accounts. Your credit mix accounts for 10% of your score and should include both revolving (credit cards and personal lines of credit) and installment (car loans and mortgages) accounts.

Perfect score consumers have an average of about six credit cards, four retail cards, a mortgage, and an auto loan. Younger consumers may have some difficulty achieving the best credit mix because they may not have certain accounts, like a mortgage.

However, it's important to point out that you shouldn't look at this list of credit accounts and assume that you need to take on lots of debt to try to improve our score. A mix of credit will develop over time.

It's important to remember that perfect score holders utilize very little of their available credit -- about 4% -- and they pay all of their bills on time.

5. Limit your credit applications

While consumers with perfect credit scores have many accounts, it's likely they're not applying for new accounts frequently. Recent credit applications, like applying for an auto loan or credit card, can lower your credit score. These hard credit inquiries account for about 10% of your score.

This is where having a long credit history helps you. If you opened two credit cards 10 years ago, those applications are far in the past and won't impact your score. But if you apply for two cards today, your credit score will take a temporary hit.

A perfect credit score might be nice, but it's not necessary. Experian says that a credit score of 760 or higher is usually good enough to get the best available interest rates from lenders. So, while there's no harm in trying for a perfect score, don't fret if you end up falling a bit short -- you're probably not missing out on much.

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