While achieving a perfect credit score of 850 might seem like the ultimate financial goal, it’s not always necessary to unlock the best financial opportunities. Lenders primarily use FICO scores to evaluate creditworthiness, and experts suggest that a score in the high 700s can be just as beneficial.
Jim Droske, president of Illinois Credit Services, emphasizes that a score of 760 or 780 already places you in the top tier for lenders. “You’re already hitting that pinnacle of what lenders care about. Anything above that is just pride.” Data shows that only a small percentage of the U.S. population actually achieves a perfect 850 FICO score. According to a May 2024 Experian study, only about 1.54% of scoreable Americans reach this maximum.
Let’s explore why aiming for a credit score around 760 is a smart move, what advantages it offers, and how you can monitor your FICO score effectively.
The Ideal Credit Score Target
Chasing an 850 FICO score might seem appealing, but it doesn’t necessarily unlock additional perks compared to a slightly lower score. Credit expert John Ulzheimer advises aiming for a 760 or higher. He notes that this score typically qualifies you for the best mortgage rates, while a 720 is often sufficient for the best auto loan interest rates.
Ulzheimer states, “I always tell people, shoot for 760 or better. That way, they’re safe for all loan types and cards.”
Even FICO acknowledges that perfection isn’t essential. Ethan Dornhelm, VP of FICO Scores and predictive analytics, explains that lenders view consumers with scores in the 800s as highly qualified applicants, regardless of whether they have a perfect 850.
Benefits of a Good Credit Score
FICO scores are categorized into different ranges, each offering varying levels of financial opportunities. While the national average FICO Score was 717 as of October 2023, a score of 670 or higher is generally considered good. This opens doors to conventional mortgages and attractive credit card options.
Here’s a look at some credit card options for those with good credit:
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Wells Fargo Active Cash® Card: Offers unlimited 2% cash rewards on purchases and a $200 cash rewards bonus after spending $500 in the first 3 months.
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Capital One Venture Rewards Credit Card: Earns flexible travel rewards, including 75,000 bonus miles once you spend $4,000 on purchases within the first 3 months.
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Citi Simplicity® Card: Provides a 0% intro APR for 21 months on balance transfers and for 12 months on purchases.
For those with fair or average credit, cards like the Capital One QuicksilverOne Cash Rewards Credit Card can be a suitable option.
Monitoring Your Credit Score for Free
Contrary to popular belief, checking your credit report doesn’t negatively impact your credit score. Many banks and credit card issuers provide customers with free access to their current FICO score. Services like Experian CreditWorks offer credit monitoring, including your FICO score and credit reports from major credit bureaus.
Additionally, Experian Boost® is a free service that can help you quickly improve your score. It links monthly bill payments, such as cell phone, gas, and streaming services, to your Experian credit report, giving you credit for on-time payments. Experian reports that members who saw score improvements experienced an average increase of 13 points.
FAQs about Credit Scores
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Is a perfect 850 credit score achievable? Yes, it’s possible, but not essential for securing the best loan terms and rates.
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What’s considered a good FICO Score? A FICO Score between 670 and 739 is considered good.
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Is a credit score of 600 good? A score of 600 is considered “fair,” allowing you to qualify for financial products, but potentially with less favorable terms.
Conclusion: Aim for Financial Excellence
While striving for a perfect credit score might seem tempting, focusing on achieving a score of 760 or higher is a practical and effective goal. This score unlocks access to the best interest rates, credit cards, and loan opportunities. By monitoring your credit score regularly and utilizing tools like Experian Boost, you can take control of your financial health and secure a brighter future.
