What does an 820 credit score mean?

A very good or excellent credit score can mean you’re more likely to be approved for good offers and rates when it comes to mortgages, auto loans and credit cards with rewards and other perks. This is because a high credit score may indicate that you’re less risky to lend to.

Lenders use this three-digit indicator, which is calculated from all the information collected in your credit reports, to gauge how likely they think you may be to default on your loans — and the higher the score, the better you look to a lender.

But even having an excellent credit score doesn’t mean you’re a shoo-in — there are still no guarantees when it comes to credit approval.

A credit score can be an important factor when you apply for credit, yes. But you actually have multiple credit scores from different sources, each one drawing on data from your various credit reports with the major consumer credit bureaus (Equifax, Experian and TransUnion). A credit score may be considered “excellent” according to one scoring model but could be calculated differently using another model that weighs certain factors differently, resulting in a different score altogether.

Also, scoring models and lenders can have different interpretations of what qualifies as “excellent.” And when it’s time to make a decision about whether to extend credit to you, lenders typically consider other factors not reflected in your scores, such as your income or employment status.

This means that while having excellent credit is a good sign that you already have a healthy credit profile, it’s still important to understand what goes into your credit scores so you can maintain your hard-won credit.

Learn more about keeping up and making the most of an excellent credit score.

There’s no one path you can follow to get an excellent credit score, but there are some key factors to be aware of while you continue to build and maintain it.

Even if you’re holding steady with excellent credit, it’s still a good idea to understand these credit factors — especially if you’re in the market for a new loan or you’re aiming for the highest score. 

Credit utilization rate

Your credit utilization rate is calculated by dividing the amount of credit you’re using by the amount of credit available to you. You should try to keep this under 30%, but usually, the lower your utilization rate, the better.

Having high credit limits and keeping your credit card balances low are two ways to help your credit utilization. If you need to lower your credit utilization quickly, you can ask your credit card issuer to raise your credit limit, but know that it might result in a hard inquiry.

If you’re planning to apply for a new card in the near future and you’ve got a high credit utilization rate, consider making some early payments on your existing card balances first. If you pay down your balances before they’re reported to the credit bureaus, it could help you get your credit utilization rate as low as you can and potentially boost your scores before you send in that new application.

Payment history

Your payment history is an important factor in your credit health. A single late payment can potentially have a big impact on your scores.

If you’ve missed a due date, it could be worth giving your credit card issuer a call to ask if it will remove the late payment, especially if that’s never happened before.

Credit mix

Another way to demonstrate your experience using credit is by showing lenders that you can juggle different types of credit. This could include credit cards, which are a type of revolving credit, as well as loans like mortgages that you pay in installments.

We generally don’t recommend applying for a loan just to build your scores though, especially if it’s going to cost you money. Also, applying for a new loan can mean a hard inquiry is logged on your credit reports, which can ding your credit.

Age of your credit history

Another factor weighed in your credit scores is the age of your credit history, or how long your active accounts have been open.

Canceling a credit card can affect the age of your credit history, especially if it’s a card you’ve had for a while, so weigh that potential impact when you’re deciding whether to close a card. Only time can offset the impact of closing an older account, but you’ll also lose the credit limit amount on a closed card, which can negatively affect your credit utilization rate.

Heads up that card issuers may decide to close your accounts if you’re not actively using them, so make sure you keep any accounts you don’t want closed active with at least an occasional minimal purchase.

New credit

Applying for a new credit card or loan typically results in a hard inquiry, which can have a negative effect on your scores. The hard inquiry’s impact is usually small, but lenders might see several hard inquiries in a short period of time as a warning sign.

Having excellent credit can mean that you’re more likely to get approved for car loans with the best rates, but it’s still not a guarantee.

That’s why it’s important to shop around and compare offers to find the best loan terms and rates available to you. Even with excellent credit, the rates you may be offered at dealerships could be higher than rates you might find at a bank, credit union or online lender.

You can figure out what these different rates and terms might mean for your monthly auto loan payment with our auto loan calculator.

And when you decide on an auto loan, consider getting preapproved. A preapproval letter from a lender can be helpful when you’re negotiating the price of your vehicle at a dealership, but be aware that it might involve a hard inquiry.

If you have excellent credit, it could also be worth crunching the numbers on refinancing an existing auto loan — you might be able to find a better rate if your credit has improved since you first financed the car.

Compare car loans on Credit Karma to explore your options.

Having excellent credit is one of the first steps to getting a great mortgage rate. But there are other factors at play here too, like the total cost of your home and your debt-to-income ratio.

Once you’ve got a sense of how much house you can afford and the type of mortgage you want, it’s time to shop around to understand the rates that might be available to you. Getting a mortgage preapproval can help you understand how much you can borrow and make your offer more competitive.

Compare current mortgage rates on Credit Karma to explore your options.

With excellent credit, you could be eligible for some of the best credit card offers.

This might include premium rewards cards that come with more-valuable rewards and top-notch perks like travel credits, free hotel nights, airport lounge access, complimentary upgrades and elite status. Keep in mind that these cards also tend to carry expensive annual fees and higher interest rates if you carry a balance. So you’ll have to weigh the benefits against the costs to see if it’s worth it for your wallet.

On the other hand, if you’re paying down credit card debt, you also might see offers for the best balance transfer cards that come with longer 0% intro APR periods and higher credit limits.

Explore credit cards for excellent credit on Credit Karma to see what’s available.

Even if you’ve got excellent credit and the highest scores to prove it, your credit isn’t something you can set and forget.

If you’re in the market for a new loan or credit card and want to make the most of those high scores, keep your utilization rate, any potential new hard inquiries and other important credit factors in mind before you apply. And be sure to compare offers before you commit. Getting the most out of your scores and understanding the various offers available to you can result in better rates, long-term savings, and access to top perks and rewards.

It’s also a good idea to stay aware of what’s on your credit reports so you can catch any potential issues, like identity theft, as early as possible. You can get a free credit report from each of the three main consumer credit bureaus periodically at annualcreditreport.com, and you can always check your credit report from Equifax and TransUnion for free on Credit Karma.