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It’s a safe bet that you don’t think about your credit score too terribly often — actually, it might be one of those things you avoid thinking about. This is a mistake, however.

Your credit score has a solid impact on your personal finances, and since it helps determine how much you pay to borrow money, it even impacts your budget.

According to research from credit bureau Experian, just 1.54% of Americans had a perfect 850 credit score as of Q3 2023. Do the math on that and you’ll realize that means 98.46% of us don’t have perfect credit. But that’s OK — and here’s why.

You can get the same benefits without a perfect credit score

Good news! According to that same Experian report, Americans with credit scores over 800 (and in some cases, in the high 700s) will get the same benefits as those with a perfect score. What are those benefits?

First and foremost, you’ll pay less to borrow money, because you’ll be offered the lowest interest rates by lenders. A high credit score indicates you’ve managed credit well in the past, meaning you maintained low balances on credit cards, paid your bills on time, kept accounts open for a long time, and didn’t open new ones frequently.

Getting a lower rate on a mortgage, personal loan, or auto loan could save you thousands of dollars on interest costs, so it’s worth boosting your credit score before you apply for a loan (more on that below).

Having good credit also means you’re likely to qualify for the best credit cards. Check out our favorite picks for travel credit cards and enjoy perks like lounge access, airline status, and more.

The other benefits of good credit shouldn’t be disregarded, either. In most states, auto insurers can use your credit score to set your premium — research from The Motley Fool Ascent found that in 2023, drivers with good credit paid less than half of what drivers with poor credit paid for coverage.

You might also face a credit check to get hired for a new job or to rent an apartment, and it would be very disappointing to lose out on those opportunities because of your credit.

Want better credit? Here’s how to get there

I can’t guarantee you a perfect 850 credit score — I’m a personal finance writer, not your fairy godmother. But if you lean on the following tips, you will see your credit score improve.

Check your credit reports

You can get these for free from AnnualCreditReport.com. Have a gander and see if there are accounts you don’t recognize, or late payments/delinquent accounts that are inaccurate. You can ask the credit bureau to remove them and you should see a jump in your credit score as a result.

Make on-time payments

If you’ve been a bit lax about paying your bills on time every month, this is your sign to get better. Payment history makes up 35% of your FICO® Score — it’s the biggest piece of the puzzle. Plus, paying on time means avoiding late fees, so you’ll save money too.

Pay down debt

This one is hard — I’ve been there. But having less debt to your name will save you money on interest costs and it’ll also boost your credit score by lowering your credit utilization ratio (how much credit you have vs. how much you’re using).

I saw my score jump by 100 points when I paid off all my high-interest debt, which really came in handy when I was applying for a mortgage earlier this year.

Open new accounts sparingly

Credit cards are tempting, with their slick rewards programs and spending credits. But for the benefit of your credit score, it’s best to limit opening new accounts to every six months or once a year.

Having perfect credit can certainly make you the envy of friends and neighbors — or perhaps the most insufferable person at Thanksgiving dinner. But it’s not a requirement to enjoy the perks of good credit.

If your credit score is in the upper 700s, great — you should be all set! If you’re not there yet, keep making those on-time payments and avoiding high-interest debt, and you’re likely to see a significant bump in your score.

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