A credit score of 823 is considered excellent by most standards. Here’s a quick overview of what that score means and why it’s good:
What is a credit score?
A credit score is a number between 300 and 850 that represents your creditworthiness. Lenders use credit scores to determine how likely you are to repay debt. The most commonly used credit score model is FICO.
Credit score ranges
Here are the general credit score ranges according to FICO:
| Credit Score Range | Rating |
|---|---|
| 800-850 | Exceptional |
| 740-799 | Very Good |
| 670-739 | Good |
| 580-669 | Fair |
| 300-579 | Very Poor |
What makes a credit score good or bad?
In general, higher credit scores represent less risk for lenders. A higher score indicates that you have a strong track record of repaying debts and managing credit responsibly. Scores below 670 are considered subprime and may make it harder to qualify for credit or lead to higher interest rates.
Benefits of an 823 credit score
A credit score of 823 is near the top of the Exceptional range, meaning it will qualify you for the best possible terms on loans and credit cards. Here are some of the key benefits of having an 823 credit score:
- Easier approval for new credit – Lenders will see you as an extremely low-risk borrower.
- Ideal interest rates – An 823 score makes you eligible for the lowest interest rates lenders offer.
- Increased credit limits – Lenders are likely to approve you for higher credit limits.
- Improved terms on insurance, cell phone plans, etc. – Non-lenders often use credit scores in pricing as well.
- Greater ability to rent an apartment – Landlords may require high credit scores.
- Higher likelihood of job offer – Some employers check credit as part of the hiring process.
How to reach and maintain an 823 credit score
Reaching and keeping an 823 credit score takes diligent effort over time. Here are some tips:
- Always pay bills on time – Payment history has the biggest impact on your scores.
- Keep credit card balances low – High utilization rates can hurt your scores.
- Limit new credit applications – Too many hard inquiries in a short period can lower your scores.
- Monitor credit reports – Check reports from Equifax, Experian, and TransUnion for errors.
- Allow credit history to age – Length of credit history also factors into scores.
Potential downsides of an 823 credit score
Despite its benefits, an 823 credit score isn’t perfect. Here are a couple potential downsides:
- Higher risk of identity theft – Exceptional credit means you’re an attractive target for fraudsters.
- Potentially overextended – Lenders may tempt you with more credit than you can reasonably manage.
How your credit scores are calculated
FICO and other credit scoring models consider the following factors when calculating your scores:
Payment history (35%)
Whether you’ve paid accounts on time, late, or have had collections or charge-offs.
Amounts owed (30%)
Your credit card balances and other installment debt compared to credit limits.
Length of credit history (15%)
How long you’ve had credit accounts opened.
New credit (10%)
Number of new accounts and hard inquiries on your credit reports.
Credit mix (10%)
Types of credit accounts, such as credit cards, installment loans, and mortgages.
Conclusion
In summary, a credit score of 823 is considered exceptional by lending standards. It qualifies you for the most favorable loan terms and maximizes your access to credit. Maintaining that high of a score requires diligent credit management over time. An 823 credit score demonstrates your financial responsibility and that you are an extremely low-risk borrower.