www.creditsesame.com

What’s worth more: $1M or 800 credit score?

Summary

  • A credit score of 800 can help you qualify for almost any loan or purchase.
  • The good news is, you don’t always have to choose between cash and credit. Your credit can work for your cash, and your cash can work for your credit.
  • You can also receive cash rewards for improving your credit score.

If you had to choose between $1 million dollars (after taxes!) or a credit score of 800, which would you choose? Which do you believe is worth more?

What can $1M get you?

A million dollars can buy a lot. Most anyone could use this to buy their dream home, dream car, and go on their dream vacation, and still have money left over. You could pay off debt, retire early, invest…the list goes on.

What can an 800 credit score get you?

Many experts say that 800 is considered an “excellent” or “perfect” credit score. With a great credit score (usually anything above 760), you qualify for almost any kind of loan or purchase. For instance, with an “excellent” credit score (and other qualifying factors) you could buy a $5 million home at a low interest rate.

Cash and credit are intertwined.

The good news is, you don’t always have to choose between cash and credit. Your credit can work for your cash, and your cash can work for your credit.

For instance, you can use your cash to pay down your debt. This improves your credit utilization. Coupled with a flawless payment history and healthy credit mix, you’re well on your way to an 800 credit score.

A higher credit score then means you qualify for more loans and lower interest rates, which means you can keep more cash in your pocket instead of paying it back in interest. With Sesame Cash, we also reward you in cash for improving your credit score.

How can you get an 800 credit score?

While it may seem impossible, a credit score of 800 is achievable. It doesn’t matter how much money you make; what matters is how disciplined you are with paying your bills and managing your credit. And to get into this exclusive club requires a combination of different factors.

Here are four steps to take to help you work towards score of 800.

Pay your bills on time: One of the most important steps is to pay every bill on time, every time. Even one late payment can potentially lower your score by 100 points.

Keep your credit utilization as low as possible: Try to stay at least under 30% of your total credit limit each month—even better if you can keep it under 10%. This means if the limit on your card is $10,000, then you ideally want your balance to be under $1,000. However, while a low credit utilization rate is one of the ways to improve your credit score, a credit utilization rate of 0% can actually hurt your credit. Lenders may think you’re not using your card at all. This sounds counterintuitive, but if the lender believes you’re not using the card, then you could mistakenly be looked at as a higher risk.

Use different types of credit accounts: Your overall credit mix is another major component of your score. Lenders want to know that you can handle different types of credit products and look favorably on those who have several credit accounts open. Examples of different accounts could include student loans, mortgage loans, auto loans or credit cards. However, be careful about opening too many new accounts at once. Lenders view multiple applications for credit cards negatively, so only open new accounts if it’s necessary.

Don’t close an account once you’ve paid it off: The age of your credit also impacts your score. Keeping older accounts open can increase your average credit age.

Monitor your credit report and dispute any errors: It’s important to monitor your credit report at least annually to make sure there are no errors. If you see an error, you need to dispute it and clear it up as soon as possible. Otherwise, the error could negatively impact your credit score. Credit Sesame can help you monitor and sends you alerts when something on your credit report changes.

Be patient with negative information: No matter how hard you try to get a credit score of 800, life may throw you a curveball. If any negative information gets on your credit report and it’s correct, it should disappear after seven years. If you have a good payment history and end up with a negative mark, oftentimes the credit bureaus can be forgiving since they understand everyone makes mistakes. If you have a one-off on your credit report, try reaching out to the bureaus to ask for a one-time forgiveness.

Which would you choose?

So while $1 million dollars may buy that dream home or even your own private island, with an 800 credit score you can potentially keep more money in your pocket. And as you strive to reach 800, Sesame Cash will deposit cash rewards into your account when you improve your score (terms apply). It’s a win-win! So which would you choose—$1 million dollars or a credit score of 800?

Join The Discussion

Become a vital part of the SesameThrive community and share your experiences and insights.

You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved.
Published June 22, 2020
Related Links

Leave Your Reply

Submitting comment...