Why the perfect credit score isn’t necessary
Editor's Note
Stellar credit can open doors and save you a lot of money over your lifetime, but if you think you need the perfect credit score to qualify for the best products and deals from lenders and card issuers, you’re in for a surprise.
Perfection isn’t necessary. In fact, you can set yourself up to receive the best offers with a credit score that is nowhere close to perfect. In this post, we’ll explain why the ideal credit score isn’t necessary and what you should aim for instead.
What is the perfect credit score?
Credit scoring models like FICO and VantageScore are designed to grade your level of credit risk on a sliding scale. Both scoring models have a range of 300 to 850. So, if you want to earn the perfect credit score, 850 is the magic number.
FICO and VantageScore scores are designed to predict the likelihood that you will become 90 days late on any of your credit obligations within the next 24 months. The higher your score climbs on the scale, the less likely you are to become seriously delinquent on a debt. This makes you a more attractive applicant to lenders, card issuers and insurance companies.
Related: How your credit scores work
The real perfect score
When you’re working to improve your credit score, it’s important to identify why you want to earn a higher score in the first place.
For example, are you aiming for a score that will make it easier to qualify for loans? Do you want a credit score that’s high enough to help you qualify for the best rates and terms from lenders and credit card issuers? If so, you can achieve both of those goals with a score much lower than 850.
To qualify for the best treatment from lenders, you typically only need a credit score of 760 or above. In the eyes of a lender, you could say that 760 is the real perfect credit score.
Some people have a hard time believing that a score of 760 — 90 points shy of the highest credit score possible — could be just as good as a score of 850. Here’s proof.
FICO offers a loan savings calculator that can help you estimate how much interest you might be charged on various types of loans based on your FICO score. It’s a great way to figure out how much money earning a better credit score might save you.
Guess what score you need to move into the highest category (with the lowest interest rate) on FICO’s loan-saving chart? Yup, 760.
Credit improvement tips
If you're not quite at 760, you may be able to improve your credit score with a few changes. If you're already at 760 or higher, just remember that even if you do earn a higher score, you’re not likely to receive any better treatment from lenders or credit card issuers.
If you are looking to improve your credit score, here are five tips that might help:
Always pay on time
Your payment history accounts for 35% of your FICO score. As a result, even the occasional late payment can do a number on your score. If you want to earn excellent scores, on-time payments are a must.
Don’t let your credit card balances climb too high
A hefty 30% of your FICO score is heavily influenced by your credit utilization (i.e., the percentage of your total available credit you are using). Make a habit of paying off your credit cards in full each month. Your credit score and your wallet will thank you.
Be patient or ask a loved one for a favor
Another 15% of your FICO score is based on the age of your credit — including the average age of your accounts. Having older accounts on your credit reports can help you in this department.
If your credit is relatively young, you can ask a loved one to add you as an authorized user to an older, well-managed credit card account.
Mix it up when it comes to the accounts you open
Some 10% of your FICO score is influenced by the mixture of account types on your credit report. So, it can help your scores to have various accounts on your reports — revolving, installment, etc. — and manage them well.
Use discretion when applying for new credit
The final 10% of your FICO score is largely based on how often you apply for new credit. So you don’t have to be afraid to apply for new credit when you want to take advantage of a good offer, but make sure you don’t apply for new accounts too frequently.
Bottom line
The highest possible credit score is an understandable goal if you’re an overachiever at heart. But an obsession with earning the perfect credit score could potentially hold you back.
Are you afraid to take advantage of valuable credit card offers because you don’t want to risk any potential damage to your credit score? If so, you could be cheating yourself out of some attractive opportunities to earn points and miles.
Turning an excellent credit score (over 800) into a perfect score can also be difficult. In fact, it’s a lot easier to turn that great score into a lower one if you follow the wrong advice on credit improvement. Remember, earning the perfect credit score may feel nice, but it won’t actually get you materially better rates on loans, so aim for a score of 760 or above, and that might just be good enough.
Related: How many credit cards should I have?
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Intro offer
Annual Fee
Recommended Credit
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.