Achieving an excellent credit score can bring numerous financial advantages. Discover what constitutes an excellent credit score, its benefits in areas like loans and credit cards, and effective strategies to maintain it. Unlock the potential of a high credit score and enhance your financial opportunities with this informative guide.

The average FICO score was 716 as of April 2022, which may come as a surprise to you.
Most FICO ratings fall between 300 and 850. The range of FICO scores from 670 to 739 that correspond to “good credit” includes a 716. You might consider yourself to have a credit score that is higher than the national average if it is more than 716.

So what exactly qualifies as great credit? The benchmark for excellence is set lower than 800, however the exact amount to surpass depends on the credit score being used (as well as the version of that score).

Let’s look at the two most popular score kinds, FICO scores and VantageScores.

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What Is an Excellent Credit Score?

Although there are several FICO score variations, the five FICO credit ranges generally break down as follows:

Outstanding: 800 and above.
Excellent: 740 to 799.
Suitable: 670 to 739.
Very good: 580 to 669.
579 and below are poor.

You may assume from the breakdown that you require a score of at least 800. You don’t need an 800 FICO score to receive the greatest interest rates on loans and credit cards, but you need to be labelled as “exceptional.”

According to Informa Research, if your credit score is at least 760, you are eligible for the lowest interest rate that day.
You would pay the same interest rate if your score was 820. Even if your FICO score of 760 doesn’t officially make you extraordinary, who cares? All that counts is if you can still get the best prices.

Here are the VantageScore credit ranges:

Very good: 781 to 850.
good:661 to 780.
fair:601 to 660.
Deficient: 500 to 600.
quite bad:300 to 499.

A FICO score of 750 is regarded as excellent. A 750 VantageScore, however, is merely regarded as a decent score. You cannot directly compare different types or versions of scores since the criteria are not all equally weighted.

Benefits of an excellent credit score

Solid credit scores open up a lot of doors. Here are just a few reasons why raising your credit score is worthwhile.

Access to a range of loan products:

If you have good credit, lenders will pretty much knock on your door and give you money. But be aware of the risks of opening too many lending products, such as credit cards, as it can be tempting to overspend. Make sure you stay within budget and don’t ruin your hard work.

Better chance of rent approvals

Your credit score rating is frequently the first component that landlords seem at when going thru condominium applications. Your excessive savings rating will assist you stand out in the condominium process. It can make it simpler to impenetrable your dream condo and provide you leverage when negotiating your lease amount.

Larger credit limits

Larger deposit limits allow you to use greater of your lender’s money. This has its obvious benefits, however there’s a little more to it than sincerely having access to greater credit. Greater credit limits additionally make it possible for you to hold a wider distance between your balance and the quantity of credit you have available. This is your credit score utilization ratio, and it plays a key function in influencing your score. The more accessible credit you have that you’re no longer using, the stronger your rating will be.

Insurance discounts

One of the first matters that insurance carriers look at at some point of the approval process is the savings scores of applicants. Lenders label human beings with high deposit scores as greater reliable and they are greater likely to approve candidates with more advantageous credit than these with low scores.

Better interest rates

Better interest rates are the result of better deposit scores. When you have a strong deposit score, your interest fees will be lower when you take out private loans, credit cards, mortgages, and vehicle loans. You’ll be able to get admission to lower month-to-month payments and you’ll store over the lifeline of your loan. More savings on hobby translates to extra money in your budget.

What Affects Your Credit Score?

There are the five factors considered in your FICO score.

Payment history: 35%.
Credit utilization: 30%.
Length of credit history: 15%.
Credit mix: 10%.
New credit: 10%.

As you can see, payment history and credit utilisation are highly valued. These two elements are likewise accounted for in the majority of credit score versions, although once more, their weights vary.

VantageScore doesn’t provide percentages for the variables used to calculate scores. The emphasis is instead on how “influential” a category could be.

This is how it goes:

Utilisation, balance, and available credit all have a significant impact.
Influential credit mix and experience.
Payment background: of moderate influence.
Less influential are new accounts.
Age of credit history: less significant.

Why an Excellent Credit Score Matters

You can save money if you have a high credit score. You’ll be able to receive the finest credit cards, reduced interest rates on loans, and, in certain jurisdictions, cheaper insurance premiums.

Having a high credit score is beneficial since it might make it simpler for you to get approved for a loan with a low interest rate when you’re in need of money for a costly home repair. If you ever find yourself with credit card debt, having a high credit score can help you be accepted for a 0% APR balance transfer card, allowing you to pay off your debt with no interest accrued.

You could feel a little bit more at ease if you have excellent credit. You are aware that if something goes wrong, like losing your job, you can use credit cards and loans to get by.

How to Find Your Credit Score

Numerous credit card companies send your monthly statement with free credit ratings. Some of them are VantageScores, while others are FICO scores. Even though 90% of lenders base their decisions on FICO scores, VantageScores can still provide you a solid picture of where your credit stands.

Free credit score applications are also available.
Some of them are score-focused, while others cover a variety of personal financial tasks including budgeting and expenditure monitoring. You could also be able to get a free score from the bank where you keep your checking and savings accounts.

Honestly? These days, finding a free credit score is not difficult.

Improving Your Credit Score

A FICO score is produced after six months of reported account data. You can create a score using VantageScore if you’ve had at least one month’s worth of credit activity during the past 24 months.

Regardless of the kind or version that’s used, you have the power to build credit habits that can result in a good credit score. You don’t get to pick the score that a lender uses, but you do have some control over it. Consider the following behaviours to raise your credit score.

Maintain a stellar payment history:Create a sensible budget, and promptly pay all of your payments. Not simply your credit card bill, but every single bill, is what I’m referring to. The key to good credit is a solid payment record.

Apply for new credit sparingly:Despite the great welcome bonus, resist the impulse to apply for a new credit card. Your credit score might be reduced by up to five points each time you apply for a credit card. Make careful you only apply for credit if you truly require a new credit card.

Watch your credit utilization ratio:You have a credit utilisation ratio, which compares how much credit you have available to how much credit you have actually utilised. Your credit score will increase if you keep your credit card balances below 30%, ideally 10%.

Stay out of debt:Start keeping track of your expenditures so you are constantly aware of the amount on your credit card. Having a framework in place is crucial if you start using multiple credit cards. Without understanding where each money is going, you’ll probably accumulate debt.

Stop obsessing about your score:Simply said, if you adopt the behaviours mentioned here, your score will rise. But don’t stress too much on the precise figure. As new information is submitted to the credit agencies, your credit score will fluctuate. Be patient, and using credit responsibly will raise your score.

How to Get Pre-approved for a Credit Card

FAQ – What Is an Excellent Credit Score?

what number is an excellent credit score

Despite the fact that ranges differ based on the credit scoring model, generally speaking, credit scores between 580 and 669 are regarded as fair, 670 to 739 as good, 740 to 799 as very good, and 800 and above as exceptional.

Can you have a 900 credit score?

On some scoring schemes, a credit score of 900 is the maximum, however this figure isn’t always achievable. At some point, attempting to obtain the greatest credit score is just unrealistic because only 1% of the population can earn a credit score of 850.

What percentage of the population has a credit score over 825?

A FICO® Score in the exceptional range is held by 21% of all customers.