Table of Contents
What does an 845 credit score mean?
A credit score of 845 means that your credit reports show that you always pay your bills on time. It indicates to lenders that you’re a very low-risk borrower. An 845 credit score is in the highest score bracket in both of the two major credit scoring models in the US (FICO and VantageScore), and it’s well above the national average.
An 845 credit score is very far from the lowest credit score of 300, and it’s very close to the highest credit score of 850. Your score is good enough to get the best terms on loans and lines of credit from the vast majority of lenders.
To put your score of 845 into context, here’s how it compares with the average for various generations:
How an 845 credit score can benefit your finances
Having an 845 credit score means that lenders will offer you all the best rates on loans, credit cards, and other types of credit. This will end up saving you lots of money when you open accounts because you’ll be able to take advantage of the low interest rates and other financial benefits of a good credit score.
Loans and Credit You Can Get with an 845 Credit Score
|Credit Type||Loan Type||Eligibility|
|Installment loans||Mortgage||Eligible for all types of mortgages with the best interest rates|
|Car loan||Eligible for auto loans with the best interest rates|
|Private student loan||Eligible without a cosigner|
|Revolving credit||Unsecured credit card||Eligible|
|Secured credit card||Eligible|
|Personal line of credit||Eligible|
|Open credit||Cell phone contract||Eligible without a deposit|
|Utilities (gas, electricity, etc.)||Eligible|
In addition to allowing you to qualify for the best credit card and loan terms, your good credit can help you snag your dream job or apartment. This is because many landlords and employers run credit checks. It can also save you money on services like insurance.
You probably won’t gain any additional benefits from trying to get your score beyond 845 because most lenders will look at an 845 score the same way they’d look at a perfect 850 credit score. 1 Nevertheless, if you’re aiming for perfection, then you may be able to further improve your credit score.
The first step is learning more about how credit scores work and how they’re calculated.
How your 845 credit score was calculated
As mentioned earlier, the two main credit scoring models are FICO and VantageScore. Although the two models have minor differences, both calculate credit scores based on the following factors:
- Payment history: Late payments lower your credit score. The later the payment, the more damage it will do. Charge-offs, collection accounts, and bankruptcies are even more damaging to your score.
- Credit utilization rate: This refers to the proportion of your available credit that you’re using (also known as your debt-to-credit ratio). A lower utilization rate is better for your credit score. Many experts recommend keeping yours below 30% (meaning you should try not to reach a $3,000 balance on a credit card with a $10,000 limit). VantageScore recommends keeping your credit utilization even lower, under 10% if possible. 2
- Length of credit history: This is determined by the age of your oldest and newest credit accounts as well as the average age of all of your accounts. Old accounts that you’ve had for many years boost your credit score, whereas new accounts lower it.
- Credit mix: Your credit score will be lower if you don’t have a balanced mix of revolving credit accounts (e.g., credit cards and store credit) and installment accounts (e.g., mortgages, car loans, and student loans).
- New accounts: When you apply for a credit card or loan, the lender will run a credit check. This will trigger a hard inquiry Hard inquiries take a few points off your credit score, and the effect lasts for up to 12 months. 3 Actually opening the account can further hurt your score and have even longer-lasting effects.
VantageScore vs. FICO credit score calculation methods
VantageScore and FICO take the same factors into account to produce your score, but they weigh them slightly differently (which is why you might have different credit scores in the two models). Here are just a couple of the differences between FICO and VantageScore: 4
- VantageScore groups the length of your credit history and your credit mix into one category called Depth of Credit.
- In addition to your credit utilization (represented as a percentage), VantageScore also looks at your current balances and your remaining available credit (represented as dollar figures).
The tables below show how the models weigh your financial decisions to produce your score:
|Payment History||Amounts Owed||Length of Credit History||Credit Mix||New Credit|
|Payment History||Credit Utilization||Depth of Credit||Recent Credit||Balances||Available Credit|
Putting your 845 score in context: how it compares to other scores
The table below shows the average VantageScore and FICO credit scores among US consumers, as well as your credit rating in each of these models and how far your 845 credit score is from the next scoring category.
|Your Rating||Points to Rating Upgrade||Points to Rating Downgrade||Average Score in US|
How to improve your credit score
Since your credit score is already nearly perfect, improving it will probably only require very small changes. To get started, you’ll need to find out which aspects of your credit history could be strengthened.
1. Review your credit reports
Before you do anything else, go to AnnualCreditReport.com and request your credit reports from all three of the main credit bureaus in the US (Experian, Equifax, and TransUnion).
Make sure that your credit reports are accurate, and dispute any errors by mailing a dispute letter to the relevant credit bureau and your creditor. In particular, your credit report may contain any of the following types of errors:
- Late or missed payments that you actually made on time
- Accounts that aren’t yours
- Duplicate accounts
- Accounts with incorrect credit limits
- Accounts with incorrect open/close dates
Next, check for negative marks or any obvious areas for improvement so that you know what to focus on. In particular, take note of the following things:
- How much you’re spending on individual credit accounts
- How balanced your credit mix is (e.g., whether you have far more credit cards than loans)
- How old your accounts are
- Whether you have any negative marks (like late payments)
There are steps you can take right now to improve your credit utilization rate and credit mix. However, if you have accurate negative marks or a relatively short credit history, then you may need to focus on maintaining your good credit and simply wait for your score to improve over time.
2. Limit how much of your available credit you’re using
Because your credit score is already very high, you probably already have a relatively low credit utilization rate. However, if you want to give your credit score an extra boost, then you might want to spend even less. FICO reported that, on average, people with a perfect credit score use only 4.1% of their available credit. 1
Another thing to consider is that the credit scoring models factor in your credit utilization on each individual account in addition to your total utilization rate. 5 This means that if you have a favorite credit card that you tend to use a lot, you can immediately improve your credit score by paying down your balance.
3. Avoid late payments
It goes without saying that your credit score will remain high and even improve if you pay all your bills on time. Unfortunately, it can be surprisingly easy to miss payments.
Here are a couple of simple tips that will help you avoid late payments:
- Set up autopay: As long as you have enough money in your account, autopay ensures that you’ll pay all your bills on time. Depending on the company and type of credit account, you might also get a reduction on your interest rate for enrolling in autopay.
- Don’t skip a payment just because it’s late: Creditors won’t report a late payment until it’s at least 30 days late. 6 You may be able to avoid a drop in your score if you make the full payment before 30 days have gone by (though your creditor may charge you a late fee or increase your interest rates).
- Don’t send in partial payments: If you don’t have enough money to pay a bill, then it’s better to wait until you have enough than to send in only some of what you owe. Creditors will report a partial payment as a late payment, but they won’t report a full payment if it was only a few days late.
4. Get credit for paying rent and utility bills on time
Your rent and utility bill payments generally won’t be reported to the three credit bureaus unless you miss a payment. However, if you have bills that you usually pay on time, then consider one of these approaches to get them onto your credit report:
- Experian Boost: This is a free service you can use to boost your credit (only with Experian, not the other two credit bureaus) for making certain types of payments. These include payments for utility bills and even subscriptions to services like Netflix, HBO, and Hulu.
- Rent and bill reporting services: There are paid services like PayYourRent that will report your rent payments to all three credit bureaus and others (like eCredable) that will report your utility payments to one or two of them. Before signing up for these services, check to make sure your landlord or property management company isn’t already reporting your rent and utilities.
- Pay your bills with credit cards: If you pay your rent or utility bills through a credit card and consistently pay your credit card bill on time, then they’ll contribute to your credit score.
How to make the most of your good credit score
When you’re starting off with a high credit score, you have several options for optimizing your finances and further building your credit that wouldn’t be feasible if you had a lower credit score.
Here are a few strategies that can help strengthen your credit profile by optimizing your credit accounts and how you manage them.
Maintain your good credit
The first thing you need to think about when you have a very high credit score is how to make sure that you don’t lose all the progress that you’ve made.
To keep your credit score high, follow these tips:
- Pay all of your bills on time.
- Avoid opening any new credit accounts (unless you need to build credit).
- Avoid closing old accounts.
- Send a debt validation letter demanding proof of any future debts that anyone tries to collect from you—this is one of your rights under the Fair Debt Collection Practices Act (FDCPA).
Ask your current creditor for better terms
If you have a revolving credit account with a good payment history, then consider contacting your creditor and asking for better terms, such as a higher credit limit or lower interest rate. Highlight your strong payment history and loyalty as a customer. Some creditors are willing to make accommodations to keep you from looking elsewhere for a better deal.
In addition to helping your finances, this can help improve your credit score. For example, getting an increase in your credit limit will automatically reduce your credit utilization rate, as long as you don’t start spending more.
Consider consolidating your debts
You can consolidate your debts by taking out a debt consolidation loan and using the loan to pay off your other debts. The primary purpose of debt consolidation is to reduce the number of payments and amount you pay each month.
With an 845 credit score, you can make the most of this approach because you’ll qualify for loans with low interest rates. If you have primarily revolving debt, this approach could further strengthen your credit by reducing your credit utilization (if you keep the accounts open) and improving your credit mix. It also reduces the risk of late payments because you have fewer accounts to manage.
However, there are some potential downsides to think about. For example, if the loan term is long, then you may end up paying more overall in interest, even if your monthly payment is lower. If you do consolidate your debts, make sure to keep your old accounts open so that you don’t reduce the amount of available credit you have.
Explore your refinancing options
Now may be a good time to refinance your car loan or your mortgage. Doing so can save you money in the long term and potentially help your credit by making it easier to keep on top of future payments.
Although it is possible to refinance when you have bad credit, you’ll reap much greater rewards with an 845 credit score. For example, you’ll get better interest rates, which will save you money and may allow you to pay off the loan quicker.
Loans and credit cards you can get with an 845 credit score
As we mentioned earlier, you can now get just about any type of financing at the very best rates. Here are all the types of credit you can get and an overview of their benefits.
Auto loans you can get with an 845 credit score
Getting an auto loan is easy with a credit score of 845. You’ll qualify for all the best interest rates, and you’ll even be eligible for 0% APR car loans that some new car dealers offer.
According to a 2020 quarterly report by Experian, people with credit scores of 781–850 (referred to as super-prime borrowers) received average interest rates of 3.80% on used car loans and 2.65% on new car loans, whereas people with credit scores in the range of 501–600 (subprime borrowers) had much higher average interest rates, at 16.56% for used car loans and 10.58% for new car loans. 7
Depending on the loan term and how much you’re borrowing, this difference could amount to hundreds or thousands of dollars in savings. If you’re thinking about buying a car, then you might want to start looking around now while your score is high.
Mortgages you can get with an 845 credit score
You’re eligible for any type of standard mortgage if you have a credit score of 845. The following are all the mortgages you can get:
- FHA loan: Your credit score qualifies you for maximum financing (a down payment of only 3.5%) on a mortgage backed by the Federal Housing Administration (FHA).
- Conventional mortgage: You’ll meet the credit requirements for any conventional mortgage because your credit score is well above 620, which is the minimum score required by the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac). 8 9
- VA loan: The US Department of Veteran Affairs backs VA home loans, and you’ll be eligible as long as you’re a member of the military (current or former) or a family member of someone who is.
- USDA loan: As long as you have two tradelines that have been open for 12 months in the past two years, you’ll meet the credit requirements for a USDA loan. 10
- Jumbo loan: Compared with conventional conforming mortgages, jumbo mortgages are larger, and they exceed the maximum value that Fannie Mae and Freddie Mac will accept when buying mortgages from lenders. Because jumbo mortgages come with a higher risk, lenders will only consider giving you one if your credit score is very good.
Credit cards you can get with an 845 credit score
As a super-prime borrower, you’ll have plenty of options when looking for a new credit card, and you’ll be eligible for exclusive deals, which card issuers reserve for the highest scorers (presuming you meet their other non-credit requirements).
The types of credit cards you can get generally fall into two categories:
- Secured credit cards: These cards require a security deposit, which your lender will use as collateral. The amount you put down will usually be your credit limit. Secured cards are a low-risk option if you want to build credit while ensuring that you don’t spend beyond your means.
- Unsecured credit cards: These cards don’t require a deposit. Your card issuer will set your credit limit according to how creditworthy they perceive you to be. In many cases, these cards offer cash back on certain purchases and other rewards.
As long as you can manage your spending, it’s a good idea to use your good credit score to take advantage of the potential rewards and higher credit limit that come with an unsecured card. With that said, if you’re worried about overspending, then a secured credit card is always a safe bet.
Be aware that opening a new credit card account will hurt your credit score, especially if most of your accounts are pretty old. This is because it will automatically lower the average age of your accounts. In addition, most applications will trigger a “hard inquiry,” which will cause your credit score to temporarily drop.
Nevertheless, as long as you keep up the good habits that got you an 845 credit score, your score will recover. Ultimately, the benefits will likely outweigh the disadvantages in the long run.