The Credit King: How to Build Your Scores the Right Way

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Behold the King of Credit Scores! His name is Tom Pavelka—and he is the proud owner of the highest credit score in America. And that’s literal—the very highest score: 848 out of a possible 850, (just two points shy of perfect credit).

Pretty impressive, huh? But how did he get it?

If you’re thinking he built his credit score by being extremely tight with his money, you’d be mistaken.

The fact of the matter is Tom has eight credit cards. (Eight!) So, he knows how to spend a dollar, yes? Further, Tom has an outstanding mortgage on his 3,000 square foot home. Still, he recently received a congratulatory letter from one of the credit bureaus, alerting him to the fact that his credit ranks higher than 100% of U.S. consumers.

[Free Resource: Check your free credit report and score]

Pavelka, who works for the government and lives in Cleveland, told The Plain Dealer, “I don’t like being called frugal…I like to spend money. I just do it wisely.” That’s a key statement—building credit isn’t about avoiding charge cards wholesale or refusing to buy things. On the contrary, it’s about using and doing those things responsibly.

You can’t properly build your scores by being too conservative, or refusing to use credit.

Paying in cash may feel comforting, but it doesn’t really do anything for you. By using credit, you demonstrate your reliability and trustworthiness as a borrower. Naturally, there’s a happy balance to be struck—you don’t want to charge every cup of coffee you drink. But you do want to use credit for appropriately-sized buys, and regularly, too. You just have to make sure you pay those bills down and off with discipline and on-schedule.

Sounds simple enough, right? (And, frankly, it’s not much more complicated.) But the sheer amount of credit-related horror stories in the media or their own negative personal experiences scare many off. Once upon a time, they got in over their heads—or had friends who did—but after suffering the pain of the collections process, they learned the wrong lesson.

They came to believe the credit cards themselves were the source of their problems, and so, many overcorrected, swearing off plastic or other lines of credit entirely.

People hear “debt”, they tend to think “bad”. But as Quizzologists have said before, there’s good debt and bad, and there are healthy amounts and unhealthy amounts.

Of course, a common credit rule-of-thumb is maintaining a debt-to-income threshold below 40%. That’s generally the debt burden you can carry without getting into trouble. Accrue much more than that, you could be flirting with a credit catastrophe. But no matter what you’re earning, if you don’t flex your credit muscles, they don’t develop, they atrophy.

[Free Resource: Check your free credit report and score]

So don’t be gun-shy! While your credit reports and scores are a means to living the life you want, you shouldn’t put the life you already have on hold. Take it from Tom Pavelka—the King of Credit Scores.