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Is Getting A Perfect Credit Score A Waste of Your Time?

There are a number of reasons why people continue to strive for perfection. Naturally, there’s a sense of satisfaction knowing that you’re doing your best and achieving results. For instance, pitching the perfect baseball game will have positive consequences just the same as achieving a perfect score on your SAT exam. Perfection has its place as well as its perks.

On the other hand, perfection isn’t always worth the effort in some cases. For many people, this concept may be difficult to grasp or even accept. When it comes to credit, a perfect credit score isn’t necessary and just isn’t worth it.

Is a Perfect Credit Score Even Possible?

To begin with, trying to achieve a perfect credit score of 850 isn’t very realistic. While it is possible to reach it, it’s very rare. According to the company who developed the FICO score, the Fair Isaac Corporation, less than 1 percent of all consumers ever actually achieve a perfect 850 credit score.

In reality, you actually have multiple credit scores. In fact, consumers have dozens of credit scores that they’re probably totally unaware of. Credit bureaus tend to calculate credit scores somewhat differently than others based on how they’re intended to be used. Keep in mind that the specific areas that are most important when applying for a major credit card aren’t the most important when you’re applying for a home mortgage. These are two completely different concepts of borrowing. Therefore, both of those lenders are going to receive two different credit scores for you.

Although it’s definitely possible to reach a credit score of 850 at some point in your life, it’s harder to claim that your score is 100 percent perfect. For example, if you’re applying for a certain credit card and receive a perfect score of 850, later on that same day you may get a score of 835 if you apply for a car loan. In other words, achieving a credit score of 850 in every scenario is virtually impossible for anyone.

Related Article: How Often Does Your Credit Score Change?

Is it Realistic to Strive for Perfection?

As stated, achieving a perfect credit score is nearly impossible. Also, getting one doesn’t necessarily mean you’ll have perfect credit in every single area across the board. Although it’s hard to stay there, most people dream of hitting 850 at least once if they can. How do people pull it off? What course of action is necessary to get there?

The systems that use complicated algorithms to calculate your credit score are known for being extremely complex and difficult to understand. If you’ve already achieved a fairly high credit score and try to make key changes regarding your credit file in order to get it even higher, you may be doing yourself more harm than good by opening too many lines of credit or opening accounts and not using them at all. This ultimately makes the attempt of trying to create a perfect credit score a risky business.

How Profitable is a Perfect Credit Score?

If your credit score is already in the 800s, you likely won’t gain a whole lot from trying to make it even higher. Even though financial lenders vary in terms of their requirements, a reasonable 760 score is usually good enough to receive the best opportunities and rates possible.

The reality is that financial lenders and institutions make a great deal of money by loaning out money. Applying for a financial loan is much different than applying to a high-profile university like Harvard. Generally, you’re not in competition with other people trying to get the same loan as you. Financial lenders seek as many qualified, responsible consumers as possible to lend them money. The more qualified borrowers they can find that pay them back on time, the more money they’ll ultimately make. As a result, it’s not necessary to achieve an absolute perfect credit score to get the best opportunities available based on your good credit. The most important thing is to show that you’re a responsible borrower overall.

Related Article: FICO vs FAKO: Are You Getting the Right Credit Score?

A Closer Look at You and Your Credit

If you went out and shopped various lenders related to the three primary lending products (credit card, car loan, and home mortgage) you would soon discover they all have one key thing in common. What is it? They all want to give you the best deal possible if you have a credit score of at least 760 or higher. In fact, there are no better rates for applicants that can reach and maintain a 760 credit score.

At first glance, this may seem illogical to some people. For instance, shouldn’t a person with a score of 830 be considered more responsible overall in terms of managing their credit than a person with a score of 770? The short answer is yes. But, in the end it doesn’t really matter whether your score is 830 or 770, both consumers are going to basically get the same opportunities in terms of the best available rates. In other words, a consumer with a solid credit rating of 770 is already deemed a golden borrower in the eyes of lenders.

With a 760 credit score, you will likely get a home mortgage for less than 3 percent, a 0 percent interest credit card introductory deal, and a 0 percent or very low interest rate on the car of your choice. You can’t get much better than that no matter how much higher your score is as long as it’s 760 or higher. For people who already have high credit scores, they’ll probably be considered elite borrowers forever.

Most consumers consistently maintain their credit scores in general. This means that if you are already in the upper 700s you’ll likely hover around that area. Unfortunately, this is almost always true for people with low or poor scores as well. Certainly there are exceptions to the rule. Many years ago, FICO published an interesting study that showed there’s a definite lack of any real migration when it comes to credit scores.

Overall, it’s wise to just keep doing the right thing and responsibly manage your credit the way you always do (as long as it’s good) and not worry about hitting 850 since it doesn’t actually make a difference anyway. Rather than taking risky actions in order to improve your credit score, simply try to maintain. Clearly you’re doing something right if you consistently rank in the upper 700s or 800s.

In the end, always try to make good, sound financial decisions. Some people are actually obsessed over their credit score and end up hurting it more than helping it. Implementing a number of changes to your personal credit profile can possibly backfire and make your credit score drop. Remember the saying – “if it’s not broke, don’t fix it”. This applies to your credit score as well.

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Yael Kent's picture

Yael Kent is a personal finance enthusiast with experience writing about credit cards, credit repair, debt, and more. In addition to being an editor at Creditnet, she has been featured on Yahoo Finance, Reuters, and other financial sites.

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