There is a small percentage of people who have ever hit 850 for their credit score. Having a perfect score is a lot of work. While this opens doors for loans and credit cards, a perfect score isn’t necessary to qualify for financing. If you’re focused on getting a perfect score, you may want to rethink your strategy.
Why you don’t need a perfect score.
One think people assume is that with a perfect score, you’ll get the lowest rates. Lenders don’t distinguish between someone with an 850 score and someone with a score between the high 700s and low 800s. Once you get to a certain point, you fall into the best credit risk category. This means even if you don’t have an 850 you still qualify for the best rates. Having an 850 score does not put you above someone between 770 and 800.
Your score can change overnight. They are not fixed, they can change from day to day. Under the FICO scoring model, payment history and the amount of debt you have make the most impact. If you miss a payment or carry a high balance on a card, your score is going to dip. Even applying for a new card, or taking a loan can knock your score down. In reality, you have more than one score. Each of the credit reporting bureaus have their own version of the FICO score. So, your score can vary widely. The chances of getting an 850 on all three at the same time is very slim.
You score reflects how you are at managing your money and handling your debt. The lenders goal is not to pick borrowers who have a perfect score but to find those who are most likely to pay their debt. Paying your bills on time, keeping a low debt balance and using a mix of debt types show that you’re a good candidate for a loan.