Going Above This Credit Score Is A ‘Waste Of Time’, Says Expert

A 56-year-old Cleveland government employee named Tom Pavelka had the “highest credit score in America“in 2012, the Daily Mail reported at the time. His near-perfect 848 ranked” above 100 percent of American consumers, “according to a letter it received from a credit bureau.

What could a score of nearly 850 have given him? The same things you get with any score in the excellent range and not much else, experts say, other than 15 minutes of fame, of course.

“Once you’re above 760, you get the best rates,” Greg McBride, chief analyst at The bank rate, told CNBC Make It. “This is why obsessing over a score of 800 to 820 is largely a waste of time.”

For John Ganotis, founder of CreditCardInsider.com, the threshold is 750. Anything above “will likely qualify you for some of the best rates and deals,” he told CNBC Make It.

You can have dozens of credit scores for different types of loans, but they will all be of the same order of magnitude because they each reflect the same credit report. FICO scores ranging from 300 to 850. While anything less than 650 is considered problematic, a score of 700 or more is prime. Once you hit 700, “you might not get the best rates, but you’ll generally qualify,” says Rod Griffin, director of consumer outreach at Experian. the average FICO score recently hit an all-time high of 704.

The advantages of a score in the excellent range, north of about 750 or 760, are significant. NerdWallet found that compared to a score of 680, a great score could qualify you for a mortgage rate that will save you money. more than $ 10,000 in interest over 30 years.

A great score can also improve your insurance rate and help you qualify for the best credit card.

However, a credit score is not all that matters. “It is important to remember credit approval decisions are based on more than one of your credit scores, ”Ganotis explains. “Lenders consider other factors, like income and the information on your credit reports.

That’s why Griffin recommends checking your report at least once a year, which is free and will not damage your score. (The idea that monitoring your score hurts is another common misconception.) “You can’t do anything about your credit report until you know what’s on it,” Griffin explains. “If there’s something you need to fix, take action. “

If you’re like most consumers, increasing your score might just be a matter of regularly paying your bills on time and keeping your balances low. “Everything else,” Griffin says, “is built on these two factors.”

A number of things seem to have contributed to Pavelka’s 848. He said he and his wife Helga had eight credit cards and a credit limit in excess of $ 120,000. This allowed them to keep their use rate low. Most people with excellent scores have a average of three open cards and three that have been closed, according to a recent FICO analysis.

Pavelka had also bought cars using a line of credit which he then paid off in full, which likely improved his score, as it showed the credit bureaus that he was good at what he was borrowing.

“I like to spend money,” he said. “I’m just doing it wisely.”

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