Have you been aspiring to achieve an ideal credit score of 900 but considering it an unattainable goal? Well, it may seem challenging, but it is not impossible to do so! You need to exhibit responsible and disciplined credit practices to reach your objective. Here, we explain the best ways to help you know, ‘how to get a perfect credit score of 900’!
Credit Score Ranges
The credit score 300 to 900 is the typical range. The more responsibly you manage your credit, the higher your credit score will be. Whenever the borrower applies for a loan or a credit card, the lenders or credit card issuers consider their credit score to determine whether to approve their application. When your credit score is high, the lenders quickly approve your request. A good credit score reflects timely repayment, low credit utilization, a great credit mix, etc. A credit score below 700 may face loan rejection and other lines of credit.
What does it mean to have a 900 Credit Score?
A 900 CIBIL score is the highest achievable credit score, demonstrating exceptional financial reliability, responsiveness, and creditworthiness. A 900 score exhibits that you manage your credit well and believe in furnishing timely EMI and credit card payments. A high credit score of 900 also indicates a healthy mix of credit portfolio, good credit length, low credit utilization ratio, no default or outstanding balances, etc.
All the lending institutions sanction loans quickly at low interest and favorable terms. The credit card companies will also offer you premium credit cards with attractive offers and deals.
Credit Score Determinants
To achieve a perfect credit score, it is important to understand what makes your credit score. Though every credit bureau has a different scoring model, they mostly use the following criteria to calculate credit scores. The most common factors affecting the credit score include:
Payment History: One of the most significant factors in determining the credit score is the payment of loan EMIs or credit cards. If you miss a single payment, it will greatly impact the score. Before approving a loan, lending institutions want to know whether you will repay the debts on time.
Credit Utilisation Ratio (CUR): Another vital factor that affects your credit score is the credit utilization ratio or CUR. This is calculated by taking the total of your available credit limit and dividing the same by the amount used. It is essential to have a CUR of less than 30% to have a great credit score.
Credit History Length: One factor that plays a role in calculating your credit score is how long you have been using credit. It considers the age of your oldest and newest credit accounts. The life span of all your credit accounts makes your credit length. A longer credit history makes a better credit score.
Credit Mix: It is important to have a diverse credit portfolio for a good credit score. If you have a credit mix of secured and unsecured loans, you can build a 900 credit score.
New Credit: Did you know that your open accounts also affect your credit score? Too many credit applications and hard inquiries disturb your score and lower your loan eligibility.
How to Get a Perfect Credit Score of 900?
An impeccable credit score of 900 can be achieved with a long history of consistent payments, diverse credit mix, low credit usage, and a good financial profile. Here, we detail how to get CIBIL score 900.
1. Do Not Delay/Miss a Single Payment
One of the strongest ways to fulfill your goal of attaining 900 credit score is to repay credit card bills and loan EMIs timely. Even a single delayed or missed payment can dent your score for a long time. If you cannot repay the outstanding, pay at least the minimum due amount.
2. Automate Payments
To avoid missing due dates, set autopay. This will ensure you don’t miss any payments. You can set the base amount to pay at least the minimum due on all the bills. The same is directly debited from your bank account.
3. Don’t Max out Your Credit Usage
Though you may have a high credit limit, ensuring you don’t use it all is vital. Remember to use not more than 30% of your available credit limit. The lower your credit limit usage is, the higher your credit score. Keep the credit utilization low on all your credit cards.
4. Don’t Close Old Credit Cards
It takes a long credit history to reach the 900 credit score. To build a longer credit, prevent closing old cards, exhibit responsible credit usage, and march towards a higher score.
5. Avoid Hard Inquiries
The lender initiates a hard inquiry whenever you apply for a new credit card or loan. Multiple hard inquiries can result in lowering your score slightly. 10 credit inquiries in last 90 days is considered very high. Apply to the best one or two banks / financial organisations for any loan. If loan or credit card is being rejected, stop applying altogether and address the reason of rejection first. Hence, apply for credit judiciously and only for essential needs.
6. Check Credit Report
According to the CIBIL Survey, 74% of Indians monitor credit scores at least twice a year. Making credit checks is also important for financial management and helps you know where you stand. Checking credit reports from credit bureaus will help you dispute errors, find fraudulent transactions, and take steps to achieve a 900 score.
If you spot an error in your credit report, write to the credit bureau. Rectifying the inaccuracies in time protects against identity theft and builds your credit score. Monitoring your credit report will also ensure the lender gives correct information about your timely payments to the credit bureau.
7. Have a Clean Financial Record
Missed payments, high debt, and defaults are red flags that can shatter your dream of getting 900 credit score. Maintain a clean financial record by avoiding these pitfalls.
8. Go for Different Types of Credit
A good mix of credit, like installment loans and revolving credit, can improve your score. This valuable strategy signifies that you can responsibly handle various forms of credit, like credit cards, personal loans, mortgages, etc. A well-rounded financial profile helps you accomplish a 900 credit score.
9. Increase Credit Limits
A higher credit limit will lower your credit utilization ratio and increase your credit score. Request your lender for a credit limit increase. The lenders will accept your request if you have been a disciplined borrower and have always paid your dues on time.
10. Consolidate High-Interest Debt
Do you have a high-interest debt? Consider consolidating the same to a low-interest card or a debt consolidation loan. This can be done through a balance transfer.
11. Keep Patience
It takes time to improve your credit history and score. A long history of responsible behavior and consistent efforts will get you 900 credit score.
Wrapping Up
A credit score of 900 is a benchmark of financial dependability. It helps you get the best loan offer, lower interest rates, and favorable terms and conditions. Achieving and maintaining a 900 score requires exceptional financial discipline and good credit management practices. Understand the factors that affect your CIBIL score, like payment history, credit usage, credit mix, etc., and strive for an ideal credit score.
FAQs:
1. What are credit score ranges?
Ans. The CIBIL credit score ranges from 300 to 900. A 900 CIBIL score is the best score you can get.
2. is a 900 credit score possible?
Ans. A 900 credit score is tough but not impossible to get. Making consistent payments before the due date every month and not defaulting will take you closer to your ‘900 credit score goal.
3. How a 900 credit score is helpful?
Ans. A 900 credit score means a higher creditworthiness. The lenders approve your loan application, offer you a lower interest rate, a better loan offer with attractive terms and conditions, etc.
4. How to get a 900 credit score?
Ans. To have a CIBIL score of 900, you must pay your loan EMIs and card outstanding on time, have a diverse credit mix, a low CUR, a long credit history, an error-free credit report, etc.
5. Who can get a 900 credit score?
Ans. Those who demonstrate exceptional credit management, have no history of defaults, and have a consistent repayment record can have a 900 credit score.
6. How long does it take to reach a 900 credit score?
Ans. It can take a few years to build a 900 credit score. Ensure financial discipline and patience to obtain this score.