October 28th, 2010

Excellent Credit Score? 3 Biggest Mistakes To Avoid

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**Welcome to Do Today Thursdays here at Credit Karma Bootcamp: Your 31-Day Credit Health Plan. Every week, we’ll cover the 3 most useful moves to do now for your specific credit score range.**

The average Joe and Jane with excellent credit has a sky-high Credit Karma credit score of 720 or higher. Lenders and issuers treat these consumers as the cream of the crop—premium rates, access to best financing options and offers, approval on almost all credit cards, and extra leverage when negotiating terms.

Joe and Jane are the best kind of customers, so lenders and issuers will go extra lengths to get and keep their business. An excellent credit score reflects a very healthy credit report, which may be checked by potential employers, landlords, utility providers, cell phone providers, and more.

32% of Credit Karma consumers fall in the excellent credit range of 720 and above, and less than one percent have a credit score above 800. If you fit this credit profile, congratulations! You’ve achieved elite credit-score status, so you must be credit-conscious, vigilant, and alert to keep it that way.

Excellent credit consumers can lose their top-notch credit due to careless mistakes. The higher your credit score, the more points you lose when you commit a negative action (one of the tricky rules of credit). A maxed out card can cost you 45 points, a 30-day late payment as much as 125 points, and say goodbye to good credit with a bankruptcy that can cost you 240 points, as we reported before. Don’t let a good thing slip away—keep an eye out on these 3 biggest mistakes to avoid.

3 Biggest Mistakes To Avoid:

  1. Not checking your credit report

    It generally takes 10 years of positive account history to break into the 800 score range. In that decade, errors and inaccuracies are bound to turn up. The damage from any uncaught errors can add up and spoil your squeaky clean credit health. Check your credit report every 4 months (You can get your TransUnion credit report for free each week from Credit Karma, and AnnualCreditReport.com provides 3 free three reports a year) and scan for any misreported information to dispute and fix.

  2. Stop using credit

    If you’ve entered your golden years and paid off every loan and mortgage, or are cash-rich enough to ditch using plastic, not using credit might seem like a financially responsible move. Actually, it ends up hurting your credit.

    Once you stop paying off loans or debt and stop using credit, your credit utilization rate will drop to 0% and you won’t add to your positive on-time payment history. Your credit score will begin to slip because the positive effect of your past credit actions will fade in time and drop your credit score, and you won’t be able to build your score without adding to your credit history or keeping up an active credit profile. Charge at least one small purchase a month to your open credit cards and pay off in full at the end of the month to keep building your credit.

  3. Apply for tons of credit

    According to Credit Karma stats, the fewer the credit inquiries, the higher the credit score: consumers with 0 inquiries had an average 726 credit score, 1-2 inquiries had 700 credit score, and downhill from there (check out the chart here). Shopping around for a good loan or credit card is recommended, but apply to very few to minimize the impact hard credit inquiries have on your credit. With an excellent credit score, you will likely be approved for the best cards and offers out there, so be choosy. Plus, excellent credit isn’t necessarily gained through have tons of credit cards; its more about consistent and long-term positive history that keeps your score sky-high.

CK Bootcamp Tip: Once you have excellent credit, don’t assume you can take a break! A single mistake can cost you as much as 240 points! Be vigilant about keeping up the good credit habits that helped get you to excellent credit, and take care to avoid careless mistakes that can knock you down.



Credit Karma Bootcamp: Your 31-Day Credit Health Plan

Throughout October, Credit Karma Bootcamp gives you daily information on what you need to make wise, credit-savvy decisions when it comes to credit cards, mortgages, insurance, loans, and most importantly, ALL THINGS CREDIT.

Follow along to get financially fit and credit healthy.


Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.


  1. I do not understand why my credit rating went from 780 to 760.I have a history of paying my bills with at 100% on time. If I have a hard inquiry I want to know where this came from, how long ago it was and when will it be corrected. I own my car and house outright, I have a large amount of money in savings so therefore I am in an excellent position. I feel I should have a 100% rating or all A’s.

    Pat Donovan at 5:49 pm on November 12, 2010
  2. Hey Pat,

    The Credit Report Card on CK can show the number of recent hard inquiries. However, if you want to know specifically where your inquiries came from, you will have to pull up the full details of your credit report, which you can get for free from a site like AnnualCreditReport.com or a credit bureau like TransUnion.

    Good luck!

    Justine at 5:05 pm on November 15, 2010
  3. Pat Donovan,

    I have no idea what is going on with the credit scores. My CK has gone down, down, down over the last two months. I have not opened any new lines of credit for four months, My installments loans have been decreasing in balance for four months, I haven’t had a credit inquiry for over four months, and some most are over 12 months old and I fell off in January. My revolving credit has gone up by $50 from 32% to 33%. I have had on time payments for four years. However, my Vantage Score did increase by one point.

    I suggest that everyone not only take a good look at your credit report, but also your credit scores and your report of credit analysis. I see things that are computed in the credit analyis that isn[‘t apparent in the credit report. You had better check for errors in the credit analysis. But, I wish you luck in trying to get them corrected.

    In the past two years, I;ve had three installment loans that I paid. One of them was a car loan. But, they only seem to count against my score because of the inquires. Little credit is being given for paying these three loans.

    I purchase another used car, opened two more insallment loans four and eight months agao. But, only this month has my Transrisk score taken a dive. I’ve been paying off the balances on the three loans from four to eith months. Why now should the scores go down.

    Personally, I think the entire credit industry has made a concerted effort to deflate credit score. After all, that means much higher interest rates and more profit.

    JohnNKC at 6:57 pm on January 7, 2011
  4. This is a bad game of cat and mouse… Who is going to win?
    People need help these days managing their credit.

    Anonymous at 4:25 pm on June 14, 2011
  5. I need help. I have identity theft and fraud. On 9/28/2013.My debit card was stolen from my mailbox and used. I have car dealer hard inquiries. And I did not fill them out. My credit wasn’t great but now I have been destroyed. Can credit Karma help me?

    Rande Hamilton at 5:59 am on October 13, 2013
  6. Jenna

    Hi Rande, sorry about your troubles. We’d recommend checking out this blog post to learn how to deal with identity theft: http://blog.creditkarma.com/personal-finance/what-to-do-if-youre-a-victim-of-identity-theft/

    Jenna at 8:02 am on October 14, 2013
  7. I couldn’t refrain from commenting. Very well written!

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