American who went to extreme lengths to get perfect credit score reveals key move
Ever wondered what it takes to get a perfect 850 credit score?
For one Texas engineer who became obsessed, it was a grueling five-year journey of trial and error.
Steve Michell, 52, already had one of the best credit scores in America, sitting comfortably in the 840s.
But for Michell, that wasn't good enough.
'I'm an engineer by trade, so everything has to be perfect,' Michell told the Wall Street Journal.
He became fixated on achieving the elusive perfect score - a goal that reflects America's growing fascination with the three-digit number that influences so many aspects of our lives..
What followed was a relentless quest to crack the code of credit scores.
Michell tweaked balances, closed credit cards, and adjusted his payment timing in a painstaking process of trial and error.
According to the credit scoring company, anything below 629 is considered 'bad', while anything above 720 is 'excellent'. Michell wanted to hit a perfect 850
He would make a change, wait a month for the results, then start all over again if his score didn't budge.
Credit scores, calculated by companies like FICO and VantageScore, can seem like a mysterious and frustrating system.
While some rules are clear - pay your bills on time and don't max out your cards - other strategies are counterintuitive.
Closing old accounts can hurt your score, while opening new ones can give it a boost. Have a zero balance on credit cards is also a no-no for boosting your rating.
For Michell, the climb to the credit mountaintop was anything but straightforward.
At one point, his banking app flagged his 'high credit card balances' as a problem, even though he was using just 6 percent of his $35,000 credit limit.
Reducing his balance to zero didn't help either. After more experimentation, he discovered that maintaining a balance between 0.5 percent and 1.5 percent of his available credit was the sweet spot.
In the summer of 2023, Michell finally achieved his goal.
Steve Michell spent a year getting a perfect 850 credit score. It took trial and error to work out how to keep it at that level. Pictured is a stock image of a man looking stressed
John Ulzheimer said most people will boost their score if they use around 1 percent of the credit they have access to
Logging into his Bank of America app, he was greeted with the message: 'Congratulations! You have the highest FICO score possible.'
But the victory was bittersweet. 'I was happy because I hit it,' he said. 'But then it's like, 'Wait a second… how do I keep it?'
Michell's perfect score wasn't consistent. Determined to achieve 850 for three months in a row, he began experimenting with the timing of his payments.
By keeping his balances in the optimal range just before his bank reported to the credit bureaus, he managed to maintain a perfect score in eight of 12 months through November 2023.
While Michell has cracked the code for himself, experts caution that pursuing perfection can be more trouble than it's worth.
Credit score expert John Ulzheimer said most people will boost their score if they use around 1 percent of the credit they have access to. The algorithms behind credit scores consider that the ideal level.
In fact, Experian found the 1.54 percent of Americans with perfect scores have lower credit card balances than average person.
Boosting your credit score won't always mean better financial health.
The national average credit score has fallen to close to 700 from a record high of 718 at the beginning of 2023
Sharon Byrne, a 50-year-old from California, opened seven credit cards - acting on advice from credit bureaus that it would increase her score.
While her score temporarily rose - up 100 points to 720- she ended up with balances on all the cards, most with interest rates above 20 percent.
For Michell, achieving 850 was more of a personal challenge than a financial necessity.
It hasn't given him any special offers when taking out credit
'My daughter gets the exact same credit-card offers I do,' he joked, 'and she's had a credit history of about four years.'
In fact, experts say there's little difference between a 750 and an 850 when it comes to loan interest rates or financial benefits.
In March last year, it emerged that Americans' credit scores had fallen for the first time in a decade. Record high prices and elevated interest rates pushed Americans further into debt.
The national average credit score last year had fallen to 717 from a record high of 718 in 2023, according to FICO.
The average American has a credit score of 717 - but this varies state to state
Once you hit 740 you are considered to have an excellent credit score for credit cards, auto loans and other non-mortgage products, according to Ted Rossman, senior industry analyst at Bankrate
Over the last ten years, the average score either increased or remained steady - rising from 690 in October 2013 to 718 last April.
However, one expert busted a big myth that says you need a perfect score. Instead, you just need a good one.
Once you hit 740 you are considered to have an excellent credit score for credit cards, auto loans and other non-mortgage products, according to Ted Rossman, senior industry analyst at Bankrate.
'For mortgages, I would say the cut-off is 780,' he told DailyMail.com.
'After that point, I would definitely continue to practice the good habits that lead to a strong credit score, but I wouldn't obsess about perfection.'
There is no practical benefit to scoring any higher, he said, rather, you just have bragging rights.
