A great credit score is about 775. Once you achieve that kind of financial consistency, your credit score ceases to be an issue whenever you apply for a credit card, loan or mortgage. Any credit score at that level or above will generally qualify for the best loans that any institution has to offer. Functionally, it is the same as having perfect credit.
Significance
Maintaining great credit can be as challenging as building it up in the first place. Any minor errors in terms of credit-affecting behavior can have significant negative effects on a very high credit score. If you've spent the time and effort required to build up your credit to that level, it helps to take some additional steps to make sure that it stays up at those lofty heights. Set up automatic bill payment programs for all fixed expenditures to make sure no errors occur.
Function
An individual can build great credit only if he has demonstrated his ability to pay back loans on time without fail for years on end. It helps to maintain credit card balances of 15 percent or less of total available lines of credit while meeting all payments regularly. In some cases, it can be helpful to prepay credit card bills to make them function as if they were secured. Then it is impossible to miss a payment, even if the credit card company does something unexpected like changing the billing date without warning.
Prevention/Solution
Pay off loans before their terms are over to help improve your credit score. This also saves money on interest payments. Lenders prefer to be pleasantly surprised by their borrowers with early payments. Choose a day in the month before most of your payments are due to send your payments in ahead of time. This way, if there are any problems with the transaction, you will be informed about them ahead of time so that they can be corrected before they become an issue.
Considerations
One of the most important concepts to understand when attempting to build a credit score is the idea of risk management. Many people end up with bad credit because they do not protect themselves sufficiently from risks like medical issues, job loss and auto accidents. They treat credit as an all-purpose insurance plan. Protect yourself from life's unpleasant shocks by maintaining an emergency savings fund, and pay for proper insurance. This helps better than any clever trick to help you build credit in the long run.
Potential
Anyone can build up a great credit score. In fact, the average credit score of people over 70 is nearly 750. The average person takes a long time to gain the settled habits that are required to maintain a great credit score, but there's no reason why anyone needs to wait until her sunset years to start enjoying the benefits of great credit. Make it a priority early in life, and you'll be able to accomplish it, no matter what your salary is, where you live or what your personal situation is.
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