For many consumers, a perfect credit score is like a four-leaf clover. You know it exists. It’s just rare. The FICO credit score model ranges from a low of 300 to a high of 850. Just 1.5 percent of scorable U.S. consumers earn an 850 as of this past April, according to Ethan Dornhelm, vice president of scores and predictive analytics at FICO. Each credit bureau report generates a score depending on the model used. The most widely used is FICO. So you can have more than one credit score depending on the credit file searched and the version of the scoring model used. I keep a constant watch on my scores, taking advantage of the many ways to view them for free. By the way, the scores given to consumers can differ from the ones used by lenders.
o you really need an 850 credit score to get the best rates?
Most people assume that in order to get the best treatment from lenders, you need to have perfect credit. Across both of the most common credit scoring brands, FICO and VantageScore, that highest score is 850 out of the now-standard range of 300 to 850.
But the truth is that while it’s nice to boast that you’ve maxed out your credit score, it’s almost impossible to achieve the magical 850. It’s also entirely unnecessary. There is no lender or credit product that requires you to have a credit score of 850 in order to be approved. There is no lender or credit product that requires you to have a credit score of 850 in order to earn the best terms. In fact, your credit scores can be 90 to 130 points off the maximum and still result in your getting approved for the best deals from mainstream lenders.
To put it bluntly, 850 doesn’t buy you anything but bragging rights.
