1. Scores Over 800 Are All Considered “Exceptional”
Experian categorizes scores between 800 and 850 as “exceptional,” meaning any score within that range opens doors to the best lending options available. So, whether you’re at 805, 820, or even a full 850, you’ll likely qualify for premium loans or credit cards with top-tier benefits.
However, income and financial standing can also impact loan approval. For instance, if you apply for a $500,000 mortgage but have an annual income of only $50,000, a lender might deny your application – not because of your credit score, but due to income factors. When your credit score is high enough to secure the same borrowing options, chasing a perfect score becomes less relevant.
2. Applying for a Mortgage and Building Equity is Better Than a Few Points
It’s well known that applying for new credit typically results in a minor drop in your credit score. When a lender performs a hard inquiry for a loan application, it might shave a few points off your score. For those aiming for 850, this dip can be discouraging, but avoiding loans just to preserve your credit score may not be the wisest financial move.
If you’re financially ready, securing a mortgage allows you to build equity in a home, which could appreciate over time. This long-term gain far outweighs the short-term impact on your credit score, making home ownership a sounder investment than striving to protect a few points on your report.
3. New Credit Cards with Welcome Bonuses Add More Value Than a Few Points
Much like other forms of credit, applying for a new credit card can reduce your credit score slightly. But if the card offers a strong sign-up bonus, like cashback or travel miles, the financial benefits could surpass the impact of a small score drop.
Let’s say you’re close to 850, sitting at 847, and applying for a credit card nudges you down to 844. You’re still eligible for premium interest rates, regardless of that minor change. Plus, if the new card offers a welcome bonus worth $300, that’s real money in your pocket, which arguably has more impact than a few credit score points. In scenarios like this, prioritizing cash in hand can often outweigh the drive for a perfect score.
Focus on Maintaining Good Credit Rather Than Perfecting It
Having a perfect credit score may sound impressive, but the benefits often don’t extend beyond bragging rights. Instead of stressing over reaching that elusive 850, prioritize maintaining a strong credit profile and making smart financial moves. A score in the “exceptional” range offers most of the same advantages, freeing you to focus on financial decisions that provide real, long-term benefits.
