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Having an exceptional credit score is sort of like having a key to the city. It opens doors and provides opportunities otherwise not available to you. You get access to the best rewards credit cards, the lowest mortgage rates, and more.

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But having a perfect 850 FICO® Score is far from necessary to live a healthy financial life. In fact, Experian says only 1.3% of Americans have a FICO® Score of 850, according to credit score research from Motley Fool Money.

The reason only around 1% of Americans have a perfect credit score is because achieving one is extremely difficult. You have to maintain a flawless payment history, keep an ideal credit utilization ratio, balance all the right types of debt, and not collect too many hard credit inquiries. The realities of life make that dance nearly impossible for most people.

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Do you need a perfect credit score?

You always want to strive to maintain the highest credit score you can, but don’t stress if you are less than perfect. FICO® Scores range from 300 to 850, with the breakdown as follows:

• 300-579 (Poor)
• 580-669 (Fair)
• 670-739 (Good)
• 740-799 (Very Good)
• 800-850 (Exceptional)

While having a perfect credit score might sound really cool, in reality, maintaining a score above 700 will make you eligible for some of the best credit cards and earn you the going national average annual percentage rates (APRs) of 21% to 28%. You may miss out on the most exclusive credit cards that are reserved for the highest spenders, but you’ll still be in great shape.

On the other end, having Poor or Fair credit can really hurt you. You’ll be ineligible for most credit cards and loans, and you’ll face significantly higher interest rates for the products you’re approved for. And while it may still be possible to get approved for a mortgage, these scores can make it more difficult or even prevent you from getting a mortgage or being approved for an apartment.

Tips to raise your credit score

The following tips will help to keep your credit score in optimal shape.

Pay bills on time

This is the most important factor in your FICO® Score, making up 35% of your total score. Setting up auto-payments for paying credit card and loan bills is one of the best ways to make sure you never forget a payment.

Reduce credit utilization

How much of your available credit you use is the second-most important factor in determining your FICO® Score. Your credit utilization score is your total outstanding balances divided by your total credit limit. Keeping that number below 30% is essential; strive for keeping it below 10% if you want to reach an 850 score.

Maintain old accounts

The length of your credit history also plays into your FICO® Score, as it proves you can handle having access to credit. This is why it’s important to keep open credit cards you’re no longer using — especially if they have no annual fee.

Will opening a new credit card help your FICO® Score?

If it’s been a while since you opened your last credit card, a new one could definitely help your score. The hard inquiry on your credit report will ding your score a handful of points, but increasing your available credit and making on-time payments can easily outweigh that. According to Motley Fool Money’s research, people with a perfect 850 FICO® Score had two more cards in their wallet than the average American — 5.9 total cards vs. 3.9. Check out our list of best credit cards to find one that’s a good fit for you.

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