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Immediately following the American financial crisis, many credit card issuers terminated accounts and reduced spending limits. As a result, some credit-conscious consumers set their sights upon the highest FICO score attainable – upwards of 800. However, experts say that this top-tier credit has little additional effect, as once an individual has obtained a FICO score of 760, a greater number does not mean that they will be availed of better interest rates on credit cards, loans or mortgage offers.
The Scoop On Credit Scores
Your credit score is a number that is most commonly determined by using scoring models established by the Fair Issac Corp. – FICO – which is based in Minneapolis. The numbers range from 300 to 850, and the higher your number the easier it will be for you to obtain a great deal on a mortgage or credit card offer.
In 2011, there were around 200 million U.S. Consumers with credit scores, and approximately 18% of them – that’s roughly 36 million Americans – have a score of 800 or above according to estimates made by FICO. That same year, over 75 million had scores equal to or greater than 750 and the median score hovered around 711.
When it comes to mortgages, any rate fluctuations due to product type and region notwithstanding, applicants with a FICO score of 120 or better tend to receive the lowest available rates.
As far as credit cards go, who the most elite card offers go to are likely dependent upon factors such as assets in addition to credit scores, as opposed to being extended based upon the merit of an individual’s credit score alone. Most card issuers, when analyzing an applicant’s creditworthiness, will examine their entire credit profile which includes pertinent information such as reported income, credit repayment history, credit bureau score and total amount of outstanding debt.
Pay On Time, Every Time
Anyone bound and determined to increase their score regardless of its current state can have the best chance of boosting their number by paying all of their credit card bills on time. Consumers who are all set with a score somewhere in the range of 750 to 800 who still want more should just carry on with the good behavior they are obviously already practicing simply maintain it for a long period of time. Other tricks to sending your score soaring aside from never being late with a payment is to keep your amount of debt low in relation to the amount of credit that is available to you and not opening up an account unless you really need to.
Cushion A Fall
Probably the biggest benefit to putting forth the effort to achieve the absolute highest credit score you are able is to create a cushion for yourself in case something unforeseeable should happen that would have an adverse effect upon your score. Additionally, bear in mind that each lender has a different cut off number when it comes to a consumer being eligible for the choicest rates. That being said, 750 should, in general, be sufficient in most cases.