The 800 Club

[vanillabean]

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@Shock_ wrote:

part of high limits comes from high income. do you think 800 is attainable for those who arent that well off?

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Very much so. FICO doesn't directly consider credit limits, just utilization (well, absolute balances too).

[user5387]

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@Shock_ wrote:

part of high limits comes from high income. do you think 800 is attainable for those who arent that well off?

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I am self-employed, and was on a roller coaster ride the last few years re my income.  That's why I got interested in credit cards in the first place -- as a financing tool to help smooth out the bumpy ride.

I have scores above 800, but it's not based on income.  I currently have around $66K of open lines, which is not spectacularly high.

I've also never had a mortgage, and my old auto loan is no longer showing.

What I do have is an AAoA of 6.9, a long history, low utilization, and no negatives.

[thom02099]

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@Shock_ wrote:

part of high limits comes from high income. do you think 800 is attainable for those who arent that well off?

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Not necessarily.  Define high income.  Many of us here have individual incomes in the $60-$75K range and household income ~$100K.  Is that high?  Not according to statistics.  That's somewhat average.  High, to me, is folks with individual income double that $60-$75K range and household >$200K. 

And even then, there's folks here at MyFICO in the 800 Club with incomes <$50K, some high achiever young people here who are learning/have learned the value of excellent credit.  I really enjoy reading of these youngsters who know what they are doing and are in their 20s!  Wish I'd been as knowledgeable at that age as some of them are now...and they're not making a boatload of money.

[Elcid89]

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@JMills wrote:

I am not there yet, but it is a goal I would love to accomplish. I am just wondering for all the folks that are in the 800 club, how did you get there? I know wants you reach 750+ you are pretty much in great standing but to have 800 is fascinating. Please tell me your journey or what you should or shouldn’t have to have a credit score of 800+

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41 years of using credit without missing a payment on anything - ever

A mix of credit products (credit cards, mortgage, HELOC, auto loans, etc.)

My advice is:

Live within your means. If thing #4 is that important to you, it'll still be as important after you have saved up the money to buy it. Learning to delay gratification is one of the primary differentiators between a responsible adult and a child.

Always, always, always, always ( I can not stress this enough) always make your payments, even if you have to eat bologna or scrimp elsewhere in order to do it. You agreed to pay, so live up to what you promised.

Have a mix of credit. Anecdotally, it is considered to be impossible (outside of apocryphal thin file stories) to break 800 without revolving, installment AND mortgage lines on your reports.

Have a long credit history - the age of your accounts plays a pretty big role as well in the calculation, so nurture your existing accounts and don't apply for every shiny new card that comes along, especially if you are just trying to get it for the implied prestige that comes attached (which is a crappy reason to buy ANYTHING, in my opinion.) Establish the accounts that meet your needs and provide the services that you actually benefit from, and then leave it alone. Only apply for new credit if 1) you absolutely need it or 2) the product offers terms or advantages / benefits that clearly make the hit worthwhile.

[vanillabean]

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@Elcid89 wrote:
819 (EQ)

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I didn't think an EQ of 819 was possible! If you don't mind, any chance you could post a picture of it? Thanks.

[longtimelurker]

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@user5387 wrote:

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3.  Related to the previous, I don't obsess over maximizing rewards.  I don't think a few extra dollars is worth it, unless the card already has other benefits I want like a high CL.  Rewards are really nice, but not at any cost.

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Each to their own way, but..  My view is more "800+ scores are really nice, but not at any cost".  i.e. the only point of having great credit is that you can use it to get nice things, so I would much rather hover around say 780 and be able to get rewards cards when I want, without dropping (for long anyway) below 760.

[Networth]

About the income aspect according to the U.S. Census about 10% of the country has a total household income greater than 100k. I think the fact we are on a financial type forum tends to scew how we view average incomes. To the general public 100k household income is not average, 55k is according to the Census. So just keep that in mind OP when you see income vs credit score on these forums.

http://www.census.gov/hhes/www/income/data/statemedian/

[Elcid89]

The score that was posted for EQ was a Beacon 09 (FICO 08). I have updated all three scores based on a pull from MyFICO (FICO 04) as of this morning.

[user5387]

One thing I'd recommend to those interested in this subject is to experiment with the FICO estimator available on this site.  I tried it just now, and it came back with an accurate score range.

It's worth trying to identify the big factors that make up a score, and the factors that don't really matter much.

For example, income is not used at all in computing the score.  The reason it's important is indirect -- a higher income may result in lower utilization, and utilization is a big deal.  Over the last few years my EX FICO has oscillated between around 770 and 825, based on utilization.

Another example of this sort of thing is types of credit.  I don't know a lot about this, but I don't have any installment or mortgage loans showing -- only revolving.  A factor like AAoA or length of history or utilitization is likely to dominate some of the other factors.

A high score is important, but it's only part of a larger picture.  If you want to get approved for any card, with a reasonable CL, you also need to look at DTI and income issues.  A high score with low income and high DTI closes some doors, and many nice cards like CSP and PRG are really not worth it unless you spend a lot and travel a lot.

Also, if you look at various CU sites that have APR tables based on scores, the top end of the range tends to be around 740-760, meaning that a higher score won't get you a lower APR.

[vanillabean]

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@Networth wrote:

About the income aspect according to the U.S. Census about 10% of the country has a total household income greater than 100k. I think the fact we are on a financial type forum tends to scew how we view average incomes. To the general public 100k household income is not average, 55k is according to the Census. So just keep that in mind OP when you see income vs credit score on these forums.

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Yes, income matters, more than having been AU'ed as a kid, more than getting a boatload of cards or building up over-the-top credit limits. Income is what pays the credit card bills. And a reason why the income level is lower than generally viewed is that for the last thirty years the wages, adjusted for inflation, of the bottom ninety percent of Americans has stayed the same. No wonder that only 6.5% has an Amex card. When that is said, a record that is both clean and active matters too.