How I Got My 800 Credit Score

A few months ago, I logged into CreditKarma to see that my credit score with TransUnion and Experian had surpassed 800! I’m not the best at seeing the long-term and so when I started working post-college in early 2010 with a non-existent credit score, I was convinced that would be the case forever! By the end of 2011, when I started condo/mortgage hunting, I had managed to get my credit score to the low 700s, which although didn’t result in the best mortgage rates, was pretty reasonable. I was definitely impatient at times in this process, but now that I have achieved the ideal credit score, I plan to no longer worry about my credit.

What principles did I follow to successfully build my credit?

  1. In the early days, I kept my credit utilization to at most 30% of the limit. Now, I don’t worry about this because I have a ton of unused credit and much higher limits.
  2. I would go 6-12 months between applying for new credit.
  3. I made every single payment on time.
  4. I applied for new credit and increased my credit limits as deemed useful early in the process.
  5. I constantly tried to remind myself that patience is a useful virtue.

2010

I tried unsuccessfully to apply for the Chase Amazon.com Visa once or twice before I smartened up and instead hunted around for a credit union that would give me a secured credit card with no annual fee. The first few places I found (cough a big bank cough) wanted to charge me $39/year for me to let them hold $500 of my money to give me a credit card! This process all boggled my mind though – why would no one lend me unsecured money when I was making $100,000 a year?

By the end of the summer, I had a $500 secured credit card from a credit union, which really just meant that $500 of my savings account with them was my credit card limit. I set my internet bill to auto-pay on the credit card each month and diligently paid the credit card off when I got the statement. Progress!

Near the end of 2010, I had finally saved up enough money to buy a car in cash*. So what did I do? My parents had always taught me that you should buy a car with credit and then save/invest the money instead. That was because they had good credit and could buy a car with a 0.9% interest rate. Me with very minimal credit ended up with a 4.99% interest rate. I wrote a check for the first $10,000 of the car, financed the remaining $10,000 and change at 4.99% for 12 months, and set up the automatic payment from my savings account, which resulted in a ~$900/month payment. Yes, I had a $900 car payment. My mom thought I was crazy. I hate debt and wasn’t willing to pay interest for any longer than necessary. I didn’t see it that way though – I saw it as the loan being offset by my savings account that were at the same credit union and so in my mind, I didn’t really have a car loan even though I did.

I also got a $1,000 normal credit card from the credit union that gave me the car loan. In 2015, I never use that credit card anymore, though I will not close it until some other useful credit card is my oldest one as this is the card giving my credit history a reasonable age.

2011

After six months with the (ridiculous) secured credit card, I asked the credit union to convert it to a real credit card. They increased my limit to $1,000 and it became a normal credit card. The points were terrible, so I hardly used it after that point. I eventually put a recurring $25 donation on it, set up a $25 auto bill payment from my checking account to it, and ignored the credit card.

I finally got approved for the Chase Amazon.com Visa…with a whopping $400 limit! What exciting times! I tried unsuccessfully to increase my limit after six months.

I was really surprised at the end of 2011 when I started condo/mortgage hunting to discover that my credit score was around 700 and I qualified for a solid 3.5% interest rate. (My credit woes were probably lessened by my 20% cash down payment and solid cash reserves.) The mortgage lender, on the other hand, was super confused by my $900/month “car payment” that was over 10% of my gross income and that combined with the proposed condo monthly costs would take up a third of my gross income. That’s okay because the “car loan” got paid off as I was going through that process.

2012

In mid-2012, I closed on my condo with a credit score in the low 700s still and a 3% interest rate.

I also opened up two store credit cards to get discounts at the till. I think I got $100 or $200 off at Home Depot for opening up one of their credit cards (and they even let me pay in cash for the purchase – never used the card and eventually closed it in late 2013) and about 20% off at a women’s clothing store for opening up one of theirs.

I promptly refinanced my condo’s mortgage at the end of 2012 once I’d paid it down to 25% and secured myself a 2.5% interest rate for the following five years.

2013

In early 2013, I made a goal to finally move away from constantly paying down credit cards to keep the utilization at a reasonable level. It went swimmingly:

I asked my primary credit union (the one that gave me the car loan) for their cashback credit card with a limit of $10,000. They said yes, basically on the spot. That card gives 1% back on everything and its points were automatically deposited into my membership accounts every month. Easy cash back, awesome.

The second step was to ask my other credit card company to increase my limit to $10,000 as well. I didn’t get the answer I wanted at first and I didn’t give up. I politely explained that 30% of that amount represents a very small amount of my monthly income and my monthly spending and asked if there was anything further they could do. I was transferred to someone with more authority who did give me a bit more of an increase from the initial offering. I’m happy with that. This card essentially gives 2% back on gas stations, drugstores, and restaurants.

By mid-2013, I was trying to optimize my credit card rewards a bit more. I ended up going with the Fidelity American Express and lo and behold, they gave me a $10,000 limit! That card was great and is definitely a keeper. It’s back to being my primary card again at last.

At the end of 2013, I did some small churning: I applied for the Chase Freedom for a $200 bonus and the Barclaycard Arrival for a $440 bonus. I still have both of those cards today, though I’m just as terrible at remembering about the quarterly categories as I had thought I would be.

2014

On my three year anniversary with my Amazon.com Visa, Chase increased my limit by $1,000! That was a nice touch, especially considering that I was hardly using the card by this point. Oh, actually, that in hindsight seems to have coincided with when I applied for the Chase Sapphire Visa. (which I plan to do again next winter once my twenty four months are up!)

I went on a closing accounts spree in 2014, closing my first credit union card and all the accounts there, my Home Depot card, my Loft card, and my Chase Sapphire Preferred months ahead of its fee being charged simply because I didn’t use it.

2015

Sometime mid-2015, my credit score surpassed 800! It’s now hovering around 795-805, which I’m perfectly fine with.

I’ve started some slow churning now with being able to charge my grad school costs to a credit card. I paid for my fall tuition with a credit card to get points and will probably continue to do that.

I’m going to downgrade/cancel the Barclaycard this year with the negative changes coming its way, especially with my reduced credit card spending. If I cancel it, that will result in just over a three year average age of credit cards at the end of this year, which isn’t too bad for having only five years and a bit of credit history.

In conclusion, time and patience will build your credit history. Good luck telling that to my 21 year old self!

 

*In hindsight, spending $20,000 of my $70,000 and change net worth on a brand-new car was a bit strange of a decision, but everything has worked out just fine and the then-$20,000 no longer seems like a luxury with my now-net worth.

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23 thoughts on “How I Got My 800 Credit Score

  1. Hi Leigh – Wow, you went through a lot of jockeying to get that credit score, well done. My wife and I both have a credit score in the 800’s and it certainly opens up possibilities.

    We only carry 1 credit card, a Capital One Venture card and we pay it off weekly (I know that’s nuts but I hate debt). That card gives me 2% cash back on EVERYTHING so I rake in anywhere from $150 – $300 a month in rebates from the card.

    What’s in your wallet? :)

    • In my wallet, I have my AU card for one of my boyfriend’s, a Fidelity American Express, my debit card, and my Chase Freedom. In the drawer at home, I also have my two credit union visas that are just there for credit history length, my Barclaycard (need to spend a tiny bit more to get points before drawer’ing it), the one I just “churned”, and my Chase Amazon.com Visa that I just use on Amazon these days.

  2. I never paid attention to my credit score until last year. I started getting really serious about FI and personal finance, so I opened a Credit Karma account. Low and behold the first time checking I had above an 800 on both reports. It was pretty simple how I got there. Never canceled a credit card, and never missed a payment. Financed a car which I paid off (never again – now I’m car-less). And I never missed a payment on student loans. Luckily no one has tried to steal my identity, yet.

    • Hah! Mine was in the high 600s the first time I saw it. It took some patience to get to 800 :) I’m really thankful no one has tried to steal my identity yet either! Once I had a mortgage and my credit score was in the high 700s, I’ve been closing any cards that I don’t use and are annoying to check up on. My credit union cards that are my oldest now though, I probably won’t close them since I still log into the site regularly.

  3. Nice work!! I’ve had a 720-760 credit score for as long as I can remember… I’ve never missed a payment.. and don’t have a high utilization rate.. My two kickers are that I often churn cards and thus my history is only about 4 years and often have a number of credit card pulls on my 2 year history. One day I might get there… If I ever get another mortgage I’ll make sure to clean this up in the year or 2 leading up to that point.. But for now I enjoy all the flights I get for $5 in taxes…

    cheers!!!

    • Thanks! Heh my history is only about 5 years total now and my average is just over 2 years and I haven’t even really churned that much. I’m not worried about getting another mortgage! $5 in taxes for flights sounds pretty sweet! :D

    • No, probably not! It’s just an exciting accomplishment :) I’m always auto-approved for credit cards now with high limits though. My last approval was in the $30k range!

  4. The last few years Discover has always been 5% on restaurants in 1st quarter and Freedom in 5% restaurants on 2nd quarter. That’s the only time I use either of the quarterly cards. Just have to remember to activate them, and they send you email reminders….

    • I spend ~$50/month at restaurants. I’m terrible at even remembering that one! I remember the Amazon.com quarter only in that I change my automatic payment to that at the beginning of the quarter and switch it back at the end. Not that I spend very much $$ at Amazon either… I’m quite happy with my 2% Amex heh.

        • from the second last paragraph: “I’m going to downgrade/cancel the Barclaycard this year with the negative changes coming its way, especially with my reduced credit card spending.”

  5. BTW, According to the American Express free Fico tool, My score is 800 too. Cool beans. I wonder if it will go down since I sold my condo and thus no longer have a mortgage.

  6. Also BTW, the average age includes all accounts on your credit report. Closed reports stay there fro 10 years, so it’s not going to reduce your average age at all. The only thin that would reduce your average age is if you apply for another new card….but in my opinion it’s not really a big deal unless you’re mortgage shopping but evne then you did just fine with a much lower score.

    • Ah cool! Well I would have gotten a rate better by about 0.125% or 0.25% had my credit score been where it is now. That’s not a super big deal though.

  7. Mine has dropped to 808 (just noticed that Citicard will give me my score for free), probably because my oldest credit card closed my account on me because I hadn’t used it in a year and had to open a new account. Fortunately Capital One was happy to give me a new one with better terms (and if I go to Canada again I won’t be stuck with foreign transaction fees)! Stupid Bank of America.

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