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What is a perfect credit score?

Credit scoring is used in almost every application which involves loaning money, or any kind of finance. Loans, mortgages, buying products on finance or even opening a bank account will use some form of credit scoring, so it's essential to know exactly what a perfect credit score is and how to get one. Interestingly enough, however, most lenders prefer customers without a perfect credit score because this means they can make more interest off late payments from an 'imperfect' customer - but it won't do your finances much harm to aim for the best credit score you can.

Why would I need a perfect credit score?

The only real value of a perfect credit score is a 'badge of achievement' to show that you can, in fact, manage your finance very well and manage to make timely payments. Otherwise, a credit score of any form is completely useless. But in a day and age where lending is paramount your credit score can be significant; everything you apply for that involves money, especially in the form of lending, will only be accepted if you meet the credit score criteria set out by that particular company.

However, there isn't an ideal perfect credit score you can have. Companies in the UK create a criteria based on their own system and compare your credit history to what they look for in a customer and give you their own score. So, realistically, your score may be perfect for one company but not for another.

Getting a perfect credit score

If you want to obtain a perfect credit score you need to start off financially savvy in the first place. Otherwise, fixing a bad credit history to a perfect credit score becomes extremely difficult, unless you work at your finances for over five years (in which most bad entries to your credit profile are erased). A perfect credit score could be obtained by:

  • Paying off all credit cards and other debts (even if they are not overdue) so you owe nothing out and have no other financial obligations;
  • Showing you have a history of no late payments or penalties;
  • Ensuring all your addresses are registered and easy to find and you have lived in your home for a considerable amount of time;
  • Owning your own home (you're likely to get a higher score if you don't have a mortgage you're paying in some cases);
  • Checking your credit report often and correcting any errors or entries that should not be there (and thus preventing identity fraud);
  • Paying off debts in unusually short time. This shows that you, as a potential customer, have a lot of money and can handle your finances better than what should be expected.

Benefits of a perfect credit score

Having a perfect credit score simply means you have more options available to you in terms of personal finance and loans. You're less likely to get rejected than someone who has a bad credit rating, for one, but you also have that peace of mind that you owe nothing (or very little) to debtors and a clear history of financial intelligence.

Is it important to have a perfect credit score?

If you're planning on applying for some form of loan, mortgage or finance that will require a history of savvy finances then having a near perfect credit score is probably essential. However, most forms of finance will accept either a good or fair credit profile, so if you've had a few missed payments here and there you won't be completely shut out.

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