WASHINGTON — The Connecticut Audubon Society introduced a rare-bird alert system this summer, texting people when a special species had been spotted.

For some people, a perfect 850 credit score is like a rare-bird sighting. You’ve heard there are consumers out there with this top number, but you just haven’t met one yourself.

The widely used FICO credit score ranges from a low of 300 to a high of 850. FICO also creates industry-specific scores, such as for the auto industry, to determine how risky a borrower may be. These score versions have a slightly wider range, from a low of 250 to a high of 900. But for general purposes, it’s the 850 that is the target to reach.

Get your score over 700 and you’ve entered good credit territory. The national average credit score recently hit an all-time high of 706, according to FICO, the company that created the scoring model used by most lenders.

But once you pass the mid-700s, you’ll find yourself in an excellent credit tier that results in the best lending deals. Keep in mind that your credit score is just one factor lenders consider. But, all things being relatively equal, a consumer with a 850 score wouldn’t get a better deal than one with a 790.

Still, perfection is a sought-after accomplishment for some.

As of April 2019, about 1.6% of the U.S. scorable population had an 850, up slightly from the 1.5% last year, according to a recent report from FICO. Only 0.85% of consumers had a perfect score in April 2009, a period in which the U.S. economy was in a recession.

Although you don’t need to be perfect, here’s how the rare consumer has been able to join the elite 850 club:

  • They pay their bills on time — all the time:

Thirty-five percent of your score under FICO constitutes your payment history. People

  • with an 850 basically have no reported history of missed payments, collections or derogatory information, according to Tom Quinn, the vice president of scores at FICO.
  • They have debt, just not a lot of it: Thirty percent of your score is derived from looking at how much you owe. The credit-scoring algorithm looks at the utilization rate for each individual active account, as well as at your total credit usage. The credit-card debt you carry over month to month can drag down your score.

The average revolving utilization for consumers with an 850 score was just 4.1%, FICO says in its recent analysis.

You’ve probably heard that you shouldn’t use more than 30% of your available credit overall or even on one card. That’s not quite accurate. There isn’t a specific threshold at which your utilization immediately begins to negatively affect your score.

However, analysis has shown that consumers with scores of 800 or higher use a small percentage of their available credit.

Credit experts at FICO and the three credit bureaus say that once you start using more than 30% of your available credit, you may be pushed into a risk tier that signals you are overextended.

So, don’t think of the 30% benchmark as a safety zone. If you want to be in rarefied score territory, pay your balances in full each month, and keep your utilization rate in the single digits.

  • They have a long credit history: Fifteen percent of your score is made up of how long you’ve had credit. For people with a perfect 850, the average age of their oldest account is 30 years.
  • They have new debt: About 10% of perfect scorers had one or more new credit inquiries in the past year. And about one-quarter had opened one or more new credit accounts in the past year, according to Quinn.

When you apply for credit, a lender will pull your credit report, and this action is called a “hard” inquiry. Your score is not affected when you view your own credit file, which is called a “soft” inquiry.

If you’re rate shopping, FICO treats multiple hard inquiries as one inquiry. But you need to shop around within a certain period depending on the credit score model used.

New credit activity determines 10% of your score. Inquiries can stay on your credit report for two years, but the action only affects it for 12 months. Research shows that people who open several credit accounts in a short period represent a greater credit risk, according to FICO.

When it comes to your credit score, don’t let the pursuit of perfection be the enemy of good enough. But if you’re not even close to being perfect, follow the example of those who have learned to use credit wisely.

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Readers can write to Michelle Singletary c/o The Washington Post, 1301 K St., N.W., Washington, DC 20071. Her email address is michelle.singletary

@washpost.com.

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