f your FICO credit score falls between 760 and 850 points, you rate among the top tier of all consumers and have the cornerstone for what I call Perfect Credit. Getting a great FICO score, however, is just part of the achievement.
Fair Isaac reports that, among consumers with credit scores of 760 or higher, only 1% risk defaulting on a debt. So having Perfect Credit also means being able to access a whole host of products and services—mortgages, automobiles, credit cards, business lines of credit, and personal loans—at the most favorable terms available in the marketplace.
Once you snag that impressive credit score, and all the benefits it entails, does having Perfect Credit today mean you’ll have Perfect Credit tomorrow? Unfortunately the answer is “no.”
For every single one of us, earning and maintaining Perfect Credit is ultimately a lifelong process. Once you achieve a high credit rating, you have to work consistently, diligently, and even methodically to sustain it. If you don’t, depending on how you manage your credit along the way, your scores can fluctuate greatly.
You may have a 680 FICO score this year, a 795 score the next, and a 762 score the following year—only to fall back to a 681 score three years later. Therefore, you should never look at your credit scores, or at Perfect Credit in general, as an end point. The truth of the matter is that your credit scores and, by extension, your overall credit rating are constantly changing.
Think of achieving Perfect Credit as akin to earning elite status on your favorite airline. Frequent fliers who obtain elite status get all sorts of nice perks, such as complimentary upgrades to cushy seats in the First Class cabin, priority boarding and baggage handling, freedom from pesky airline fees, and bonus miles that can be used for free travel. I currently happen to be a Platinum Elite member with Continental Airlines. Platinum Elite passengers rack up 75,000 miles or more annually.
If I fly a little less or change my travel patterns, I could be downgraded to Gold Elite status (50,000 miles) or Silver Elite status (25,000 miles). In fact, if I opt to restrict my travel severely, or perhaps spread my travel among multiple carriers, it’s likely that I would not earn elite status at all. I am very aware of the fact that every calendar year, starting January 1, I have to re-qualify for my flying status.
The same principle holds true for sustaining my elite credit status. As of this writing, my top FICO score was 788. (My husband’s was 775.) Every year that I manage my credit well, I am rewarded with certain perks, such as 0% credit-card deals, offers to increase my business line of credit, and a stress-free approval process when I want to apply for a loan.
My goal in writing this book is to help you earn elite credit status too. I want you to win at the credit game by using practical, proven techniques to manage your credit and debt wisely over a lifetime. I mention debt also because the debt you take on is inextricably linked to your credit standing. Remember, the whole purpose of a credit score is to summarize your risk to a lender by predicting the likelihood that you will repay a debt. I will consider myself successful if you read this book, apply its key strategies, and wind up with the following:
- FICO credit score of 760 or higher
- The qualifications to get approved for any credit you require
- Detailed, up-to-date knowledge about your credit at any given time
- Mastery of how to manage credit wisely on an ongoing basis
- An understanding of the written and unwritten rules that govern credit
- The ability to eliminate excessive debt, particularly “bad” forms of debt
That is the complete definition of Perfect Credit, which is within your reach. In fact, I have developed a virtually fool-proof system for you to get Perfect Credit in just seven manageable steps. This method for improving your credit can work for anyone, regardless of age, income, professional background, marital status, or level of financial sophistication. Trust me: Once you get Perfect Credit, you’ll never want to settle for anything less. I speak from personal experience. In fact, many of you have heard me talk about getting out of debt, and improving my own credit, on Oprah, Dr. Phil, ABC, CNN, Fox Business Network or daytime talk shows, where I regularly appear as a guest expert.