will pay off someday?

Maybe you think there's no number that defines you. But corporate America disagrees. Industry

defines you with three digits, your credit score, and it influences everything from how

much you'll pay to borrow money to whether you can buy a cellphone, land a job, or rent

an apartment. It's not easy to make sense of your finances.

I'm Shahien Nasiripour and I want to meet people with an obsession to beat the system

and never leave money on the table.

It's become such a popular measure of character that there's a dating service that matches

people off of it. Maybe it's not for you. It's definitely not for me. Around 200 million

Americans have FICO scores, but only about 1.5% of them have that perfect 850 number.

One of the folks who knows how to join the 850 club is Stan Kellman. He learned to game

a system after his score fell below 600 during the Great Recession. Let's give him a ring

and find out how he did it. Hey, Stan, thanks so much for taking the time

to chat. Thank you for having me.

What moved you to want to achieve an 850 credit score?

I just happened to have the misfortune of graduating with my MBA in the recession and

got into some debt. In the process of settling that debt, my credit score dropped. What it's

like to live with a low score, it really sucks. If you have a mark on your credit report,

it will not go away for seven years, for 10 if you have a bankruptcy.

You mentioned that you had negotiated with your creditors. How did you go about doing

that? You'll get daily collection calls and they'll

want you to make a payment. What you don't realize is once you make a payment, your clock

gets reset. By law, after 180 days of nonpayment is when they are required to write it off

for accounting purposes, and right before the 180 day mark is when you can call them

and make a deal. I could settle some cards for as low as 20

cents on the dollar. You are not paying back what you promised to pay back, but at the

same time, there are big banks that got billions of dollars from the government in bailout

funds and I didn't. So that was my own personal bailout.

Why didn't you just stop when you got to 780? Why did you try to get that elusive 850?

Because that's my personality. I wanted my perfect score. The scores are not developed

for you. They're developed for the banks to evaluate your credit worthness. They're not

a measure of your personal financial health. You can be deep in debt and have a perfect

score, and that's not good for you. And it's better to have a middling score, but have no

debt. Let's look at how these credit scores are

weighted. Peoples with perfect 850 scores never make late payments. The 850ers use maybe

5% of the big credit limit and have had a diverse mix of loans and card accounts over

the years. They also haven't applied for any new credit recently.

It's not the fairest system, but you really don't need to be perfect to get it to work

for you. Wisebread.com founder, Janet Alvarez, raised her score 300 points, and she's got

tips on how to raise your score and keep it there.

In order to get the perfect 850 or 860 credit score, it's going to take sort of impeccable

performance on every aspect of your credit. But you don't really need it. You don't need

a perfect score to get the best rates or the best offers. You just need a really good score.

Younger people are inadvertently penalized because if you're younger, you're just not

going to have a lot of credit history and to get the maximum boost out of this component

of your credit score, you're going to want a credit history of 30 years or longer. Even

if your credit isn't great, if you do qualify for more credit, ask for higher credit limits

on your existing cards or try to get new cards. Again, that improves your credit utilization

ratio so that opens your score. It can boost it by something like 50 to 100 points within

a month, depending on how much additional credit you take on.

There's a different score generated for the type of loan or the type of credit you're

seeking, so for the purposes of credit cards or a car loan or a home loan, you might get

different scores, and that's just because they're looking at different selection criteria

based on what you're borrowing for. So get to work on your score. Give yourself

some credit along the way.