Here’s why looking for perfect credit isn’t worth it.
Credit scores range from 300 to 850 which is considered perfect credit. If your score is close to 300, your chances of being able to borrow money or qualify for a credit card are pretty slim. On the other hand, the closer you get to that 850 mark, the more borrowing options you have. With a score of 850, you are likely to be approved for the best credit card deals and get a low interest rate on a mortgage or personal loan.
Still, working towards a perfect 850 credit score isn’t worth it. Here’s why.
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1. It’s hard to get
There are many factors that go into calculating your credit score, and sometimes a seemingly innocent move can cause your score to drop slightly. For example, a simple credit card application could lower your score by 5 to 10 points. Likewise, paying off a loan could lower your score, even if you would expect the opposite to happen. In other words, you can be an extremely responsible borrower and not always get a perfect 850.
2. You could make yourself miserable
To get your credit score to 850, you may need to avoid applying for new credit cards for several months. And that could mean forgoing great rewards programs or signup bonuses. It’s not worth losing these perks when they might put some money in your pocket.
3. You don’t need it
A credit score of 850 will give you plenty of borrowing options. But so will a score of 800. Once your score hits a certain level – usually the top 700s – it doesn’t matter how high or how perfect it is. Someone with a credit score of 825 who requests a credit card offer is just as likely to be approved as someone with an 850, all other things being equal. Likewise, once your score hits that upper area, you’ll likely get the lowest interest rate available on a mortgage or personal loan. It is not worth emphasizing a number that will not necessarily get you much when your credit is already on.
You could be proud of your credit score, so it’s understandable that a perfect score is attractive. But rather than stressing out to hit that 850, you’d better focus on keeping your score strong. This means paying all bills and installment loans, maintaining a very low credit card balance (or no balance at all), keeping long standing credit card accounts open, and not opening too many cards at once. time. If you stick to this plan, not having completely perfect credit shouldn’t bother you in the least.