Everyone strives to have excellent credit, but some people like to go above and beyond to get perfect credit, which, according to the FICO scoring model, is 850.
But is it necessary to have perfect credit? Trying to reach that ace in the hole can leave you scratching your head and wondering what you’re doing wrong. It can take a lot of work to go from excellent to perfect, and you might question how much a perfect score changes things.
Luckily, US News My Money has some peace of mind for anyone worrying about getting a perfect score.
What Is A Perfect Credit Score?
Because different scoring models have different ranges, there’s no definite figure that can tell you what’s “perfect.” If you’re looking at a variation of the FICO model, it could be 300, or it could be 850.
Many factors have to come together to get an 850 FICO rating, which is why it can feel like your fate is up to chance, not concerted effort. To achieve an 850 score, you need a long and spotless history of credit, as well as a high score on every FICO model criteria, which includes:
- Payment history (35%)
- Amounts owed (30%)
- Length of credit history (15%)
- Credit mix (10%)
- New credit (10%)
Although most lenders implement FICO models, some use VantageScore, which varies from 300 to 850.
Many credit card providers use FICO Score 8, which maxes out at 850, or FICO Bankcard Score, which stops at 900. This means that even if your FICO Bankcard Score is 850, it’s not necessarily “perfect.”
But there’s something else to think about. Someone who has a better credit on the VantageScore scale could have lower credit with FICO because each model assesses the scoring factors differently. So if you have an 850 with VantageScore, you technically have perfect credit.
What all of this means is that there is no consensus about what constitutes “perfect credit.” There are too many variables, even within specific scoring models.
How Frequently Does Your Credit Score Change?
The three major credit bureaus update your report when they receive new information about your finances. However, this doesn’t happen immediately. The credit agencies must complete an authentication process before they officially update your report. Once your account is updated, the latest details are included when a lender performs a credit check.
Not every lender reports to every bureau, though. This can complicate things further. Despite each credit agency using the same report, your score can vary. So you may have a perfect score from Experian, while Equifax lists your rating as “good.”
You can see why there’s no point in pursuing a perfect credit score. You owe it to yourself to let this one go, or you’ll end up exhausting yourself in the process. Instead, concentrate on achieving (or maintaining) a score that will help you get the best interest rates and product offers.
760 Is As Good As Perfect
If you think achieving a perfect credit rating will help you get the best possible rates and deals, you might want to think again. That’s because people who have a credit score of 760 can enjoy the same benefits as someone with a rating of 850.
Lenders extend their most favorable offers to applicants with credit of 760 or more. So you won’t receive a better interest rate for having a perfect score. You can go for the gold if you want to, but if it means agonizing over your credit score, then stop while you’re ahead. Because when it comes down to it, 760 is as good as perfect.
If you are on your credit-building journey and want to achieve a FICO Score of 760, here are a few tips to reach your goal:
- Pay your bills on time and in full every month
- Maintain a low balance on all of your credit cards
- Pay your credit card balance twice a month
- Avoid applying for new credit cards frequently
- Don’t cancel old credit cards
- Check your credit report for free each year
These techniques may seem basic — because they are. But following these rules is one of the best ways to lock in that 760 and still get excellent financial offers on your next application.
- Harzog, Beverly. “Why You Don’t Need a Perfect Credit Score.” U.S. News & World Report, U.S. News & World Report, 18 Nov. 2020, creditcards.usnews.com/articles/why-you-dont-need-a-perfect-credit-score.