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Why Trying to Get an 850 Credit Score Is a Waste of Time

Achieving a perfect credit score is an impressive feat. But only a tiny percentage of consumers ever hit the 850 mark. Getting a perfect score requires a lot of hard work. And while it’ll make you a shoo-in for a loan, a perfect score isn’t necessary to qualify for financing. If you’re focused on nailing that elusive perfect score, here’s why might want to rethink your strategy.

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You Don’t Need a Perfect Score to Get the Best Rates

One thing people incorrectly assume about having a perfect score is that it’s what you need to get the lowest interest rates. The reality is that when it comes to rates, lenders don’t distinguish between someone who has an 850 score and someone whose score is in the upper 700s or the low 800 range.

Once you get past a certain point, which for most lenders ranges from 750 to 780, you fall into the best credit risk category. That means that even though you don’t have a perfect score, you’re still going to qualify for the best rates. In short, someone who has an 850 score doesn’t have an edge over someone whose score is 770 or 780.

Related Article: What’s a Good Credit Score These Days?

Your Score Can Change Overnight

Why Trying to Get an 850 Credit Score Is a Waste of Time

Credit scores aren’t fixed and they can change in the blink of an eye. Under the FICO scoring model, the factors that have the most impact on your score are your payment history and the amount of debt you carry.

If you happen to slip up and miss a payment or you run up a high balance on one of your cards, that can lead swiftly to a dip in your score. Even something as small as applying for a new credit card or loan can knock a few points off that 850 score you’ve worked so hard for.

Also, the reality is that you have more than one credit score. All three credit reporting bureaus -Equifax, Experian and TransUnion – issue their own version of the FICO score, so yours can vary pretty widely. The odds of pinning down a perfect score with all three at the same time are relatively slim.

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Good Financial Habits Are More Important

Why Trying to Get an 850 Credit Score Is a Waste of Time

Your credit score is more than just a number – it’s also a partial reflection of how good you are at managing your money and handling debt. Ultimately, a lender’s goal is not to cherry-pick borrowers who have perfect scores but to find the ones who are most likely to pay back their debts.

Paying your bills on time, keeping your credit card balances low and using a mix of different types of debt responsibly all show that you’re a good candidate for a loan. Instead of zeroing in on reaching that perfect-score milestone, why not focus on establishing a history as a reliable borrower? Obsessing over getting that perfect 850 is only going to be a source of stress and frustration if you can’t hit your goal.

Photo credit: ©iStock.com/mbbirdy, ©iStock.com/DNY59, ©iStock.com/kupicoo

Rebecca Lake Rebecca Lake has been writing about the nuts and bolts of personal finance for nearly a decade. She is an expert in investing, retirement and home buying topics. Her work has been featured on The Huffington Post, Business Insider, CBS News, U.S. News & World Report and Investopedia. As a homeschooling mom of two, she's always looking for ways to make the most of every dollar.
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