According To Experts, Just 1.6 Percent Of Americans Have A 850 Credit Score

Is it really necessary to have a flawless credit score? According to experts, this credit score will certainly provide you with all of the same advantages – as well as the finest discounts.

According to FICO's most current figures, just roughly 1.6 percent of the US population has a flawless 850 credit score. But it may not be as important as you believe.

Some experts believe that a flawless credit score is not required to qualify for the best credit cards, loans, or interest rates. In fact, achieving a credit score of 760 will almost certainly provide you with the same advantages — and the greatest discounts — on everything from mortgages and vehicle loans to credit card rewards.

We ask them why a 760 credit score is the only one that counts and what it takes for lenders to consider you creditworthy in the video below.

 

Why do experts recommend aiming for a credit score of 760?

While joining the 850 club may be thrilling for some, it doesn't come with any extra privileges that you wouldn't obtain with a 760 score.

Financial analyst John Ulzheimer, formerly of FICO and Equifax, tells CNBC Select that the best stated interest rates for car loans are 720+ and for mortgages are 760+. "As a result, I constantly advise them to aim for 760 or above. They'll be safe for all loan kinds and credit cards this manner."

The barrier is also 760 for Jim Droske, president of the credit counseling firm Illinois Credit Services (and someone who has a flawless credit score). However, he claims that striving for 780 is even better in order to be "the safest" in any financing circumstance. Anything greater, on the other hand, will not benefit you or get you a better deal with better conditions.

"Certainly, if you're over 760, or 780, you're getting the best you can get," Droske tells CNBC Select. "You've already reached the zenith of [lenders'] concerns." In comparison to someone with a lower credit score, a high credit score informs lenders and credit card issuers that you are less of a danger and more likely to repay the loan.

"Anything above that is probably just a little pride," Droske adds. "There's no need to seek for a ladder if you've already reached the top."

 

What FICO has to say about having an ideal credit score

Even a spokesperson from FICO, the scoring model used by most lenders to assess applicants' creditworthiness, claims that having a credit score in the top 2% of the population won't help you, so don't worry.

"The fact is that it doesn't matter if you have a perfect 850 or a score slightly below that when it comes to applying for credit," says Ethan Dornhelm, VP of FICO scoring and predictive analytics. "A customer with a credit score in the 800s is a shining candidate to lenders."

 

Why does having a high credit score important, and how can you check it for free?

It's OK if you don't have a credit score of 760. Many others are in the same situation as the national average FICO score has consistently grown over the years, reaching a record high of 703 in 2019. The good news is that if you have a decent credit score (670 or above) or even an exceptional credit score, you will almost certainly qualify for some of the finest cards, including those with the greatest benefits.

The American Express® Gold Card was selected best overall rewards card because it gives cardholders 4X points every dollar spent at restaurants and supermarkets in the United States (on expenditures up to $25,000 per year, thereafter 1X). In addition, 3X points may be earned on flights booked directly with airlines or via Amextravel.com. Applicants with strong or exceptional credit may apply. Terms and Conditions apply.

The American Express Blue Cash Preferred® Card ranks as the top rewards credit card for groceries, with users earning 6% cash back at U.S. supermarkets on up to $6,000 in purchases each year (then 1 percent ). This card also gives 6% cash back on certain streaming subscriptions in the United States, 3% cash back at U.S. petrol stations, 3% cash back on public transportation, and 1% cash back on all other transactions. Applicants with strong or exceptional credit may apply. Terms and conditions apply.

Make sure you check your credit score on a regular basis to keep track of your credit development. It's a good idea to keep track of your credit, and it won't hurt your score (which is a common misconception). Most card issuers provide free credit score checks via applications like Discover's Credit Scorecard and Chase's Credit Journey, which are accessible to all cardholders.