How to Obtain a Perfect Credit Score

A credit score can range from 300 to 850, but, according to Bankrate.com, a credit score above 825 is rare. According to MSN Money, lenders offer the best rates to borrowers with credit scores of 740 or higher. Created by the Fair Isaac Corporation, a credit-scoring company, your scores are checked during many transactions, from the setting of insurance policy premiums to evaluation of job applications. If your credit is already tarnished, you may need a longer time to reach a perfect score because late payments and other negative listings can stay on the credit report for up to 10 years.

Instructions

1

Use your available credit by charging purchases to a credit card or getting a loan. Demonstration of a responsible use of credit helps you to build a good credit score -- something that a cash-only lifestyle will not do. Show your responsible use of credit by using a major credit card issued by American Express, Discover, MasterCard or Visa; a retail store credit card is not sufficient.

2

Pay credit-card balances in full each month, if you can. Not carrying a balance can help to boost your score to the 800 or higher. If you must keep a balance, spread it out over multiple cards instead of having a large balance on one card. Doing this keeps your credit utilization ratio low, which promotes a high credit score. MSN Money recommends a utilization ratio less than 10 percent. For an installment loan, such as a car loan, make your monthly payments on time, because late payments damage your credit score.

3

Stop applying for new lines of credit. Too many inquiries can lower your credit score. Inquires remain on your credit report for two years. Instead, keep open current lines of credit, because closing accounts also can have a negative effect on your credit score.

4

Monitor your credit reports regularly to watch for inaccuracies, which can damage your credit score. AnnualCreditReport.com enables consumers to receive free annual credit reports. If you see something incorrect on your credit report, follow the credit bureaus dispute process to request its removal.

5

Wait for negative items to fall off your credit report. Generally, a negative item appears on your credit report for seven years. The exception is a Chapter 7 bankruptcy, which stays on your credit report for 10 years. As negative items age and are removed from your credit report, your credit score will improve.