Why You Don't Need a Perfect Credit Score

The last time I checked my FICO score, it was 838. I write about credit cards and credit scores for a living, so that made me crack a smile. A perfect credit score is supposedly 850, so I'm just short of that.

And guess what? I don't care about reaching the revered 850 credit score. I'm perfectly happy to sit here -- in a Zen state of mind, no less -- with my 838 score.

Here are the reasons I don't worry about it.

A Perfect Credit Score Might Only Last a Week -- or a Day.

A perfect credit score is like the wind. It's subject to a sudden change in direction.

A lot of things have to come together for an 850 score. You need a long and stellar credit history. You need to score high on every factor of the FICO score: payment history (35 percent), amounts owed (30 percent), credit mix (10 percent), new credit (10 percent) and length of credit history (15 percent).

[Read: The Best Low Interest Credit Cards of 2018.]

You can always get sneaky and try to game the system. For instance, pay your credit card bill twice a month to make sure a low balance or a zero balance is reported to the bureaus.

But seriously, if you start trying to max out every factor of the score, you could end up in worse shape. Don't get into debt with an installment loan just to beef up your credit mix.

Think of your score as a snapshot: It reflects the day and time your report is pulled and the version of the score that's requested. The next day, a snapshot might produce a different score.

The Standard for Perfection Is Kind of Fuzzy.

While FICO scores are used by 90 percent of lenders, there are many different versions of FICO scores depending on what type of credit you're looking for.

According to myFICO.com, most credit card issuers use either FICO Score 8 or FICO Bankcard Scores. The highest you can get with the FICO Score 8 version is 850, but the highest FICO Bankcard Score is 900. So, you might have an 850 FICO Bankcard Score, but that's not a perfect score.

Then, to make it even more confusing, some lenders report to all three bureaus, but some only report to one or two. This is why, even if the same credit score version is used, you can have different scores from each bureau. You could have a perfect credit score from Equifax but a lower score from TransUnion.

And while 90 percent of lenders are using FICO score models, 10 percent of lenders are using something else. VantageScore is a popular non-FICO score option. The VantageScore 3.0 and 4.0 models range from 300 to 850.

[Read: The Best Rewards Credit Cards of 2018.]

A person who benefits from the VantageScore algorithm might have a lower score with FICO. So, if you have an 850 VantageScore, does that count as a perfect credit score? It probably should, but my point is that there isn't an official agreed-upon perfection standard when it comes to credit scores. There are too many versions, even within the FICO brand.

So even when I hear people say they have an 850 credit score, I want to ask what version of the score was used and how many bureaus were involved.

I can tell you from personal experience that these questions are not appreciated. So just give them hearty congrats and move on.

Lowering Your Standards Saves Your Sanity.

No, you won't have to turn in your high-achiever credentials because you decided to get by with a number that isn't a perfect credit score.

By this, I mean shoot for 760, not 850. Having a score of at least 760 gets you the best deals. That's all you need. When a credit card company determines your annual percentage rate, there isn't a dean's list category for a score in the stratosphere.

You can keep shooting for 850 if the journey really does make you happy, but if it stresses you out, then stop the insanity. Enjoy life as a person with a 760 score, which is high enough for you to be treated as if you have a perfect credit score.

[Read: The Best Cash Back Credit Cards of 2018.]

Here's a list of habits that will help you eventually reach a 760 FICO score:

-- Pay all of your bills on time.

-- Keep low balances on credit cards, and pay the bill in full and by the due date. Your credit utilization ratio is the amount of credit you've used compared with the amount of credit you have available. Keep it under 30 percent for a very good score. To get a great score, keep it under 10 percent.

-- Only apply for credit when you need it. Don't chase bonuses for credit cards you'll never use again.

-- Don't close old credit card accounts unless you have a good reason, such as a high annual fee. Closing an account can increase your credit utilization ratio.

-- Check your free annual credit reports for errors and signs of identity theft. There are three bureaus. I check one every four months so I get a glimpse of what's happening during the year.

These tips will keep your credit score pretty high. And they work for just about every credit score version. Do the right thing in your credit life and you might not have a perfect credit score, but you'll be more than fine.

Beverly Harzog is a nationally recognized personal finance and credit card expert. She's the bestselling author of five books, including award winners, The Debt Escape Plan and Confessions of a Credit Junkie. She has appeared as a credit card expert on TV and radio, including CNN, Fox News, ABC News Now, NY1, WABC-NY, and Bloomberg Radio. Her advice has been featured in The Wall Street Journal, USA Today, The New York Times, Money, Kiplinger, Real Simple, and thousands more. As a consumer advocate, her mission in life is to help consumers stay out of--or get out of--credit card trouble. To connect with her, visit BeverlyHarzog.com.