Posted by: John S Kiernan

The highest credit score you can have is 850. That’s the maximum credit score used by all of the most popular credit-scoring models today. While less than 1% of people have that highest possible credit score, according to score providers, far more of us can claim to have perfect credit.

Get Your Latest Credit Score – 100% Free

Anyone with a credit score of 800+ (about 15% of us) has essentially perfect credit for the simple reason that lenders don’t price products for the top 1% of people. In other words, before you reach the absolute highest credit score possible, you’ll arrive at a point where improving your score further will stop saving you money. And saving money is the name of the game.

Fortunately, a large percentage of Americans are within striking distance of perfect credit, if not the maximum score, as you can see in the following table.

Here’s how far we are from the highest credit score:

Score Range	% of Adults
800-850	14.5%
750-799	14.2%
700-749	14.3%
650-699	15.7%
600-649	10.2%
550-599	13.0%
500-549	13.6%
300-499	4.5%

Source: TransUnion (VantageScore 3.0)

Below, we’ll take a closer look at what it takes to build perfect credit and pick the brains of people who have come close to reaching the top of the credit totem pole. If you’d like to see how far you are from credit perfection at the moment, you can check your latest credit score for free on WalletHub. We update your score every day, so you’ll always know where you stand.

How to Build the Highest Possible Credit Score

Credit scores convey a lot of information. And you can learn a great deal about the nature of credit-score perfection as well as how to achieve it by analyzing the profiles of people with an 850 rating. So let’s take a quick look at some of their common traits:

Bear in mind that the credit performance highlighted above is by no means universally representative. It’s certainly possible to achieve perfect credit with a different background. And it’s entirely possible that you won’t reach such heights even with this sort of exemplary record.

Tips for Building the Highest Possible Credit Score

There is no secret recipe for building an 850 credit score. But there is indeed a playbook for putting yourself in the best position to achieve the highest possible credit score. It all begins with a credit card, as you’ll learn from the following:

1. Maximize Your Available Credit: Credit cards are the best credit-building tool available because most people can get approved for one. They all report information to the major credit bureaus on a monthly basis, and they don’t have to cost you a thing. As long as you pay your bills on time and avoid spending more than you can afford, your credit reports will fill with positive information, and your credit score will improve. And you can help things along by keeping your credit utilization below 30% – or even below 10% if you’re really aiming for perfection.You should also consider becoming an authorized user on a family member’s credit card account. Assuming your relative has good credit or better, his or her standing will effectively rub off on you and accelerate your credit-score gains.

2. Never Miss a Payment: If there’s one thing you can control when it comes to credit building, it’s payment history. Payment history accounts for at least 35% of most credit scores. And you can avoid forgetting to pay your bill by setting up automatic monthly payments from a bank account. You just need to make sure there’s enough cash available in the account every month to cover the payments. Check Your Payment History

   With that in mind, it’s wise to contribute to an emergency fund on a monthly basis as well. With a solid stash of cash backing you up, you will be less susceptible to missing bill payments and incurring credit-score damage if you’re ever met with a significant, unexpected emergency expense. Your goal should be to save about a year’s worth of take-home pay for this purpose, but even a few months’ pay will go a very long way.

3. Don’t Rush Things: Credit-scoring models compare the types of accounts on your credit reports to those of people your age or folks with a similar financial profile. This reflects how well-rounded of a borrower you are and the extent to which your financial responsibility has been tested. But while demonstrating financial versatility is necessary to achieving a perfect credit score, rushing things is a recipe for disaster. So wait to get a car loan, mortgage, etc., until you’re truly ready.

4. Don’t Get Discouraged: Even if you never reach 850, “merely” having excellent credit is an amazing achievement. It will save you boatloads of money over the course of your life. And it won’t ever stand in your way like a “bad” score. Plus, you may find consolation in the fact that having excellent credit means your score is higher than over 60% of people, according to WalletHub data.

For more tips and info, check out WalletHub’s Guide to Building Credit.

Ask the Experts: Aiming for 850

For some outside perspectives on just how realistic reaching the top of the credit-score scale is and how fruitful of an accomplishment that would be, we posed the following questions to a panel of personal finance experts. Meet them and see what they had to say, below.

• Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?
• What percentage of people would you say have an 850 credit score?
• What is the best piece of advice you have for someone shooting for an 850 credit score?

< >

• Cagla Yildirim Resident in Financial Planning at Texas A&M University
• Steven J. Welch Associate Professor and Chair in the Department of Accounting & Finance at St. John’s University
• Dan Horne Professor of Marketing at Providence College School of Business
• Sterling Raskie Lecturer of Finance in the Gies College of Business at the University of Illinois at Urbana-Champaign
• Todd M. Shank Associate Professor of Finance in the Kate Tiedemann College of Business at the University of South Florida St. Petersburg
• Wayne Kelly Chair and Professor of Finance, Real Estate and Business Law at The University of Southern Mississippi
• Thomas Rimer Fixed-Term Faculty in the Department of Finance at Michigan State University Eli Broad College of Business
• Demissew Diro Ejara Associate Professor of Finance and Director of the Samuel S. Bergami Learning Center for Finance and Technology in the College of Business at the University of New Haven
• Michal Herzenstein Associate Professor of Marketing in the Alfred Lerner College of Business & Economics at the University of Delaware
• Madhavi Venkatesan Assistant Professor of Economics at Bridgewater State University
• Naveen Khanna Chair of the Department of Finance at Michigan State University Eli Broad College of Business
• Stephani Mason Assistant Professor in the School of Accountancy & MIS at DePaul University
• Hossein Nouri Professor of Accounting & Information Systems in the School of Business at The College of New Jersey
• Nana Y. Amoah Associate Professor of Accounting in the Crummer Graduate School of Business at Rollins College
• Susan Doty Senior Lecturer in Economics and Director of the Center for Economic Education & Financial Literacy (CEEFL) at The University of Texas at Tyler
• Bachman Fulmer Assistant Professor of Accounting, The University of Tampa
• C. Michael Smith Lecturer, Business Administration & Economics, Roanoke College
• Scott Hoover A. Stevens Miles Professor of Banking and Finance, Washington and Lee University
• Gary Poe Associate Professor, Grambling State University
• Jennifer A. O'Sullivan Assistant Professor of Finance, Louisiana State University of Alexandria

Cagla Yildirim Resident in Financial Planning at Texas A&M University Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money? It is always good to have a high credit score; however, it may take years to achieve a perfect score. We are talking about a lot of effort here. Of course, you can save money with an excellent FICO credit score. A good example would be a mortgage loan -- with an excellent credit score, you can get low interest rates, thus you can save money on the interest that you pay back. What percentage of people would you say have an 850 credit score? According to a 2010 estimate by the Fair Isaac Corporation, approximately 0.5% of consumers attain the perfect FICO score of 850. What is the best piece of advice you have for someone shooting for an 850 credit score? Keep your debt level low, have different types of debt (mortgage, student loans or others), avoid late payments, and monitor your accounts regularly. Steven J. Welch Associate Professor and Chair in the Department of Accounting & Finance at St. John’s University Is there any point in trying to reach an 850 credit score? No. I have never heard of any lender offering better terms for a perfect score over a near-perfect score. Would reaching the highest possible credit score save someone with excellent credit any money? Certainly not much, and probably not any. What percentage of people would you say have an 850 credit score? I read somewhere that it is about 0.5% for FICO scores. But attaining a perfect credit score on all the different credit score formulas simultaneously may be impossible. What is the best piece of advice you have for someone shooting for an 850 credit score? Don’t -- it is a waste of personal resources. Shoot for excellent credit (generally, above 800 for FICO). Dan Horne Professor of Marketing at Providence College School of Business Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money? No. As long as you’re north of 800, you are considered an excellent risk. Someone in the low 800’s might want to try to improve their score just to stay on the right side, but those granting credit know that you are splitting hairs when comparing 825 to 850 -- both are going to pay back any credit granted. What percentage of people would you say have an 850 credit score? Maybe 1 percent, but that’s like finishing first in a preliminary race where the top five advance. If you’re anywhere in the top five, you get the same outcome. What is the best piece of advice you have for someone shooting for an 850 credit score? Be patient and don’t make a lot of changes. A big part of credit score is history -- the longer you have been meeting your obligations, the higher the score. Sterling Raskie Lecturer of Finance in the Gies College of Business at the University of Illinois at Urbana-Champaign

Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?

One point may be for an individual to feel the satisfaction of achieving a score of 850. However, once a score gets past 720, I see no benefit to increasing the score for the sake of increasing it. Granted, a high score is ideal, but once an individual is in the "excellent" rage (720-850), there's little more they can do to get access to great interest rates and financing.

What percentage of people would you say have an 850 credit score?

Don't shoot for 850. Just be consistent in paying off your credits cards in full each month (if and when used), as well as any other debt such as car payment, mortgage, students loans, etc. Use credit as a tool and let time work for you. Over time, the score will gradually increase. For cards no longer used, simply shred them. Don't cancel them; let the company close them for you (as this won't adversely affect an individual's credit).

Finally, if you don't get to 850, don't worry. As long as you're above 720, that's a great place to be. Be consistent and work to stay there.

Todd M. Shank Associate Professor of Finance in the Kate Tiedemann College of Business at the University of South Florida St. Petersburg

Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?

From a financial standpoint, I don't believe there is much value in trying to reach a FICO score of 850, since most lenders will put you in the "Excellent" category when you reach 800. Most credit providers use such "ranges" to categorize borrowers, and base the lending rate on the category (Excellent, Good Fair, Poor, etc.) that their unique credit history earns them.

I suppose, perhaps, that there are consumers out there that have a perfect credit score as a personal goal, in the same ways there some who make extra efforts to earn "Gold" status in an airline frequent flyer program. As the WSJ reported, there is now a dating website that, after finding out that similar credit scores were a primary compatibility factor for “significant others,” uses credit scores to match up potential dates/partners. But again, these are personal reasons, not financial ones. A lender is unlikely to favor (i.e., better loan terms) a borrower with a perfect score (850) over another borrower in the Excellent category (800-849).

What percentage of people would you say have an 850 credit score?

According to a study done by Fair Isaac Corporation (makers of the FICO score) in 2010, only one half of 1 percent (o.5 percent) of consumers ever attain a FICO score of 850. It would be interesting to see if that has changed over the past 7 years, but I doubt that it has. That same study found that only 18.3 percent of all consumers were currently rated as Excellent, with scores of 800-850.

What is the best piece of advice you have for someone shooting for an 850 credit score?

My advice for someone shooting for an 850 would be to understand how unlikely it will be that they will reach that goal, and that it won't benefit them beyond being able to brag to their friends that they reached this pinnacle. For those interested in trying, the web is replete with books and articles that offer tips for this quest.

Wayne Kelly Chair and Professor of Finance, Real Estate and Business Law at The University of Southern Mississippi

Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?

While higher scores are definitely preferred to lower ones, it’s likely more important to take consistent care of your credit quality than to make the maximum 850 a specific goal. To get a concrete example, I asked Casey Bacon, CEO of Statewide Federal Credit Union about that institution’s lending policies as influenced by credit scores. As with many lenders, that one assigns letter grades based on borrowers' credit scores in ranges of points. A grade of A+ would be assigned to scores of 730 and above; A for scores between 680 and 729; B from 640-679, and so on. According to Mr. Bacon, scores between 750 and 850 generally pay the same rates at his institution. It’s likely that most consumer credit would be treated similarly, if not the same, across financial institutions.

What percentage of people would you say have an 850 credit score?

Scores that high are not that common. For the same institution as above, 0.64 percent of the members residing in its home state of Mississippi have a credit score of 850.

What is the best piece of advice you have for someone shooting for an 850 credit score?

This parallels the old advice, “Don’t make better the enemy of good,” in that paying too much attention to attaining the perfect score may cost the consumer opportunities they would be better off taking. After all, the point of having good credit is to be able to borrow to take on opportunities that are not reachable with out-of-pocket funds. A maximum score is rather less important than a high-quality score based on an excellent repayment record, and as large a balance of unused credit as you can maintain at any given time. Paying attention to those will contribute to the score continuously.

Thomas Rimer Fixed-Term Faculty in the Department of Finance at Michigan State University Eli Broad College of Business

Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?

Improving your credit score can yield many benefits to a consumer, not the least of which is favorable interest rates and other terms on loans (as well as making more potential loans available). In addition, many employers look at potential hires’ credit reports, and insurance companies often use credit scores in setting rates and terms of their products as well. So, there is clearly a benefit to having an “excellent” credit rating, as opposed to a rating considered to be merely “good” or worse (these terms are subjective and don’t correspond to any particular level consistently across the industry).

However, once a consumer has achieved a score of around 800 or so, there probably isn’t much benefit in going through too much trouble to attain a higher, or even perfect score. Most lenders will give their best rates and terms to consumers above a certain score, and don’t add any additional perks to their offers for people with “perfect” credit scores. Consumers can definitely save money by increasing their scores up to a certain level, but additional savings tend to dry up once the 800 level is accomplished.

What percentage of people would you say have an 850 credit score?

According to the Fair Isaac Corporation (who produce the widely used FICO score), approximately 1.4 percent of consumers have a perfect credit score of 850. This is likely an accurate percentage for all of the other credit rating agencies as well.

What is the best piece of advice you have for someone shooting for an 850 credit score?

Credit card companies are very guarded about the formulas and algorithms they use to produce credit scores. While it’s impossible to know exactly what triggers a perfect score, following a few general principles will help raise and keep consumers’ credit scores high:

• Never use all of your available credit;
• Pay off outstanding balances every month, or at least keep the percentage of debt-to-available credit low;
• Never make late payments on anything;
• Make sure your total available credit does not exceed your income (keeping this percentage fairly low is a definite plus);
• Keep accounts open for as long as possible -- an account in good standing that has been open for 10 years, for example, yields more credit score points than an account that has only been open for 2 years;
• Don’t apply for more than one or two new credit cards/loans per year.

Demissew Diro Ejara Associate Professor of Finance and Director of the Samuel S. Bergami Learning Center for Finance and Technology in the College of Business at the University of New Haven

Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?

It is always good to have high score, especially if someone intends to borrow money to buy property, such as house or car. But the credit scores are ordinal rankings, they don’t translate into any particular probability of default. In general, the higher the score, the lower the probability of default. The higher the credit score, the lower the interest rate is and the more favorable the credit terms are to the borrower. Users look at range of scores instead of a particular score to make those decisions. Score above 800 is considered exceptional. Scores in the range of 750-800 are considered excellent. In terms of credit decision and the interest rate that would be charged, I don’t believe there would be any difference between a person with a score of 800 and that with 850. But still, the higher the score the better.

What percentage of people would you say have an 850 credit score?

The specific number, such as 850, is not reported. FICO reports show that a little over 20 percent of Americans have scores above 800.

What is the best piece of advice you have for someone shooting for an 850 credit score?

Someone shooting for 850 credit score must have already known the advantages and disadvantages of having clean credit and high score. She or he should advise others. Low credit score results from financial difficulties or carelessness in taking care of bills. Improving credit scores requires only paying bills as they come due and strengthening one’s financial position. It does not cost anything else. Companies, for example, pay a fee to get credit rating by rating agencies. Individuals don’t.

Michal Herzenstein Associate Professor of Marketing in the Alfred Lerner College of Business & Economics at the University of Delaware

Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?

There is usually no point in aspiring to get a FICO score of 850. All the good stuff happens starting at 800 -- interest rates on loans are better, credit card offers are better, etc. But some people see it as a “personal achievement.” It requires a lot of monitoring and “hacking” -- like knowing when to apply to which credit card or loan, etc. I am not sure it is worth the time (at least for me).

What percentage of people would you say have an 850 credit score?

About 1.4 percent of Americans have a perfect score.

What is the best piece of advice you have for someone shooting for an 850 credit score?

First, they need a lot of time; then, they need an app that helps them monitor it closely. Some credit card companies can also help with that, like AmEx. Next, they need to have two or three credit cards, each with low balance (like 20 percent utilization), and each for a long time (try not to close old accounts), some loans, like a car loan, and make all payments in full and on time.

I have to tell you that from my own research, I learned that banks rely on FICO way too much. They are obsessed with lending money to people with high scores, at the expense of looking at the terms of the loan more carefully, like whether the loan is too large for someone’s income. This is why my research suggests relying on more than simply the score and demographics.

Madhavi Venkatesan Assistant Professor of Economics at Bridgewater State University

Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?

As an economist, I look at the cost to benefit related to an activity. Therefore, though a perfect score may be appealing from a psychological perspective, from an efficiency perspective, it is not necessary to achieve the benefits attributed to being an excellent credit risk. Typically, an individual with a FICO score of at least 750 can enjoy the same benefits.

An excellent credit score is defined within a range; for FICO scores, this is above 750. Being within this range can provide the holder with a lower cost of credit on mortgages and car loans, and ease in securing rental leases and cell phone and utility contracts.

What percentage of people would you say have an 850 credit score?

Less than 20 percent of Americans have a FICO score of 800 and above. As a result, a perfect score will likely be consistent with 3 to 5 percent of the population.

What is the best piece of advice you have for someone shooting for an 850 credit score?

Don’t. Maintain a strong credit profile, but don't obsess on a single score value. Keep your debt-to-income ratio low, and use credit sparingly. However, understand that fluctuations in your score may occur from time to time as a result of credit applications, inquiries and use. Instead of focusing your energy on a specific value, ensure that your spending and payment behavior maintains your credit score within a range that is indicative of prudent money management, and consistent with an excellent credit risk rating (above 750).

Naveen Khanna Chair of the Department of Finance at Michigan State University Eli Broad College of Business

Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?

The highest FICO score is 850. Most banks would consider any score above 800 to be excellent, and above 700 to be very creditworthy. It is probably meaningless to try to get a score of 850, as that is determined by some factors that may be out of your control -- like your outstanding balances, the length of your credit history, how many credit cards you have, how many times you have applied for credit, number of inquires they get about you, etc. Even if you have a perfect payback record, you are unlikely to get a score of 850.

Stephani Mason Assistant Professor in the School of Accountancy & MIS at DePaul University

Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?

Ideally, yes, but practically, no. It is somewhat misleading to describe an 850 credit score as a perfect credit score, since applying for credit can cause your score to decrease a few points -- recent applications for credit is one factor in the FICO score. Any score over 720 or higher is considered excellent and will usually result in a lender or creditor providing their most favorable credit terms.

What percentage of people would you say have an 850 credit score?

On average, people are considered to have fair credit, which is in the 550-639 range. Based on the information that I have seen, probably less than one percent hit an 850.

What is the best piece of advice you have for someone shooting for an 850 credit score?

• Don’t pay late and certainly don’t let accounts go to collection.
• Don’t apply for credit that you don’t need.
• Manage your debt-to-income ratio.
• Don’t take it too hard if you don’t get to 850.

Hossein Nouri Professor of Accounting & Information Systems in the School of Business at The College of New Jersey

Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?

No. An excellent credit score of more than 750 should be sufficient. People who have good/excellent credit scores may save some money through lower mortgage interest rate and car insurance.

What percentage of people would you say have an 850 credit score?

I would say 0.1 percent, if any.

What is the best piece of advice you have for someone shooting for an 850 credit score?

Pay your debt on a timely basis, before the due date.

Nana Y. Amoah Associate Professor of Accounting in the Crummer Graduate School of Business at Rollins College

Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?

There is really no compelling reason to try to attain an 850 credit score. The important thing is to be in the excellent credit score range in order to get the best interest rate and save money. Therefore, an individual with a credit score in the excellent range will not save money on attaining the highest possible credit score, as he or she already qualifies for the best interest rate.

What percentage of people would you say have an 850 credit score?

An 850 credit score is rare. About 1 percent of people have an 850 credit score.

What is the best piece of advice you have for someone shooting for an 850 credit score?

There is really no need to focus on achieving an 850 credit score. To get the best interest rate, it is more important to maintain an excellent credit score and focus on other important criteria that are used in lending decisions, such as total expenses to monthly income ratio (or debt-to-income ratio).

Susan Doty Senior Lecturer in Economics and Director of the Center for Economic Education & Financial Literacy (CEEFL) at The University of Texas at Tyler

Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?

I love this question, because it allows us to discuss the underlying economic way of thinking about personal finance in general and credit scores in particular. In economics, we weigh costs and benefits and assume rational decision-makers will only choose to do those things for which the benefits exceed the cost. Further, we make decisions on the margin considering only the next choice, not all or past choices.

In this particular situation about achieving a perfect credit score, we must first ask why? What is the goal? Let's think about it in terms of other life choices. If you have an "A" in a class you're taking and you will be able to maintain that grade regardless of the outcome of your final exam, how hard do you study for the final? If your apartment is sparkling clean, do you get down on your hands and knees to further scrub the corners with a toothbrush?

If you score is high enough on the GMAT to get into your top-choice graduate school, do you need to take the exam again in an attempt to raise your score further? Likewise, if your credit score is already excellent, what is the benefit of making it perfect and what would be the cost of doing so?

The marginal benefit of moving from a good credit score to an excellent one is important for getting the best interest rates on the largest and highest-quality loans. My advice is to make the personal finance choices that earn you an excellent score. Beyond that, what drives the decision? Ego? Vanity? Bragging rights? Who's to say what is rational, if you believe the benefit outweighs the cost.

Bachman Fulmer Assistant Professor of Accounting, The University of Tampa I don’t think there is any point in trying to achieve a perfect credit score. An excellent score of 750+ is all you need to get optimal credit terms, and good credit scores of around 720 or more often qualify for preferred terms as well. I wouldn’t recommend anyone try for a perfect credit score as some factors are not in your direct control. Just focus on making good credit decisions in your day-to-day life and the scores should follow. C. Michael Smith Lecturer, Business Administration & Economics, Roanoke College

Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?

There isn't really any financial reason to strive for a perfect 850 credit score. If a person's credit qualifies as "excellent" (around 790-800 or better) then it is my understanding that their credit score is sufficiently impressive to qualify them for the best rates, premiums, etc. Therefore, to answer the question - a perfect score would not save anyone any money over someone else, who's score was 849 or even 800. However, just because there is no financial benefit, doesn't mean it is a bad goal. If someone wants the psychological satisfaction (and potential bragging rights) of achieving a perfect credit score, then that is as good of a goal as any...

What percentage of people would you say have an 850 credit score?

I've read that only about 1% of consumers ever achieve a perfect score. It would be my hypothesis that the number of consumers who achieve (and maintain) a perfect score would be much lower than that. Even after someone reaches 850, if they don't do everything right - their score could easily fall below perfection once again.

What is the best piece of advice you have for someone shooting for an 850 credit score?

The "Fair Isaac Corporation" (FICO) is pretty secretive about the actual calculation used to compute their scores - but there are a few things we do know. Thirty-five percent of the score is based on a record of on-time payments and another thirty percent is based on credit utilization. We also know that the length of time credit has been established is a factor and they like to see different types of credit (not just a credit card use but perhaps a mortgage or an auto loan). Therefore - my advice for achieving the perfect score would be to pay your credit cards and other loans on-time and in full - every time. Next, don't use more than about 10% of your total credit limit. As an example, if your credit card has a $10,000 limit - then don't use more than $1,000 of the limit each month. Third - keep your accounts open and active (the earlier you get started - the better). Don't take out new credit lines unless you plan to use them regularly - and don't close the accounts once they are open.

Scott Hoover A. Stevens Miles Professor of Banking and Finance, Washington and Lee University

Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?

In general, there is no particular advantage in achieving a particularly high credit score. In fact, maintaining a very high credit can be quite counterproductive. To understand this, consider that one factor in determining a credit score is the amount of credit used relative to the amount available. We can often increase the credit score by simply using less debt. However, debt is an important part of the financing equation for significant purchases. If we limit the amount of debt used, we give up a major advantage of debt: the ability to buy and use nicer homes, cars, etc. In addition, once a potential borrower reaches the upper levels of the credit score range (roughly anything above 750 or so), there is no significant monetary advantage in the form of lower interest rates or fees. Basically, if you have an excellent credit score you will typically get the same financing deal as someone with a perfect credit score. The marginal financial benefit from increasing a credit score is quite low once you get into the upper range.

What percentage of people would you say have an 850 credit score?

Reports typically suggest that 1-2% of U.S. consumers have a perfect credit score.

What is the best piece of advice you have for someone shooting for an 850 credit score?

My best piece of advice is to not shoot for an 850, but if you really want to go for it here are a few pieces of advice. First, always pay off your bills on time and pay them in full (or at least pay well above the minimum payment). Paying a few days late or making the minimum payment will tend to drop the score a bit. Second, make sure that your credit utilization is well below your credit capacity. For example, if you have $50,000 availability on your credit cards, make sure your balances on those cards are always low (think less than 10%, for example). Third, meet those objectives for a long time. Credit scores depend not just on your payment histories and loan sizes, but also on the length of time you've been a high quality borrower. Fourth, maintain different types of credit accounts so that you can demonstrate success across multiple sources of capital. If you only have mortgage debt, for example, the credit rating companies aren't able to see whether you can successfully handle the temptations of having credit cards. Fifth and finally, once your situation is stable avoid applying for new types of credit. When you apply for credit, creditors check your credit history and that creates a temporary downtick in your credit score. Having said all that, people should know that it is really, really difficult to get to the 850 level.

Gary Poe Associate Professor, Grambling State University

Is there any point in trying to reach an 850 credit score? Would reaching the highest possible credit score save someone with excellent credit any money?

I see little reason to hit a perfect credit score unless you want bragging rights. I do however value a high credit score. This is the question how much is enough? Most companies are ecstatic with a score over 725. As the score approaches the upper limit get even happier.

What percentage of people would you say have an 850 credit score?

I have no idea how many people have an 850 but I would think it would be less than 1%.

What is the best piece of advice you have for someone shooting for an 850 credit score?

If you want to raise your score to 850 keep your spending under control, your balances low, pay your accounts to zero every payment period.

Jennifer A. O'Sullivan Assistant Professor of Finance, Louisiana State University of Alexandria

To answer your questions, I would say that there is no advantage to having perfect credit. The rates you will be offered on loans will be the same as someone with excellent credit, or with a score in the high 700s. I think no one has perfect credit because so many things affect your score. For example, you could have financed a new car a few years ago, but the bureaus will still deduct points for "new" credit.

from Wallet HubWallet Hub


via Finance Xpress