‘No one has figured out how to hack the system’: This Texas engineer spent 5 years trying to get an 850 credit score. But does improving your score really impact your financial health?

Figuring out the system

For more than two decades, Michell maintained good credit by paying his mortgage on time and avoiding credit card debt. Yet, despite his diligence, he couldn’t reach 850.

Determined to crack the code, Michell started experimenting. After closing a few retail credit cards and addressing his "high credit card balances" flagged by his Bank of America app, he took a more strategic approach. He found that keeping a small balance — between 0.5% and 1.5% of his available credit — was more effective than carrying no balance at all.

John Ulzheimer, a veteran of the credit industry, explained, “No one has figured out how to hack the system. The credit scoring system has now trained people to act like lower-risk consumers.”

This aligns with Experian’s finding that the 1.54% of U.S. consumers with perfect credit scores tend to manage their credit by having lower credit-card balances and only using a small fraction of their available credit.

Michell’s persistence finally paid off in the summer of 2023. When he logged into his Bank of America app, he was greeted with a message he had been waiting years to see: “Congratulations! You have the highest FICO score possible. You are doing an excellent job managing your credit.”

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Is it worth it?

A good credit score comes with undeniable benefits. For example, if your score is 700 or higher, renting an apartment may be smoother, as landlords often favor applicants with strong credit.

Bruce McClary, spokesperson for the National Foundation for Credit Counseling (NFCC) says another advantage of having a good credit score is that it can help you get the best rates on car and homeowners insurance. Nationwide Insurance, for instance, claims that credit-based scoring offers a fair assessment of a driver's risk, lowering premiums for about half of its customers.

When it comes to borrowing money, a good credit score can also come in handy. For example, a higher score can help you qualify for lower interest rates on a mortgage, potentially saving you more than 1% in interest.

But is chasing the perfect credit score of 850 really worth it? The truth is, it might not be worth the effort.

There’s often little difference in the interest rates offered to borrowers with scores of 750 versus 850. The effort required to reach credit perfection may not yield much of a payoff.

Knowing your credit score is valuable for making informed financial decisions, but life happens, and unexpected expenses can derail even the most careful financial plans. While credit perfection may be achievable for some, like Michell, it’s not always realistic or necessary for others.

Even Michell himself questions whether the 850 score was worth the extra effort. A good credit score is important, but before aiming for perfection, it’s worth considering whether the benefits justify the time and energy.