A credit score is three digits that provide potential creditors with a brief overview of your credit history and reliability. The leading credit score is known as FICO score which is the short form of Fair Isaac Corporation and its scale ranges from 300 to 850. Consequently, according to the theoretical aspect, 900 is an extremely high number concerning the credit score. But can anyone achieve 900?
What is considered a good credit score
Credit scores may be anywhere from 300 to 850, but the majority of people fall between 600 to 750. Experian has pointed out that the mean FICO score in the United States is 716. Generally speaking:
- Any score that falls below 580 is regarded as poor.
- 580-669 are fair
- 670-739 are good
- The years 740-799 can be considered as very good.
- 800-850 are exceptional
Thus, while 850 is an outstanding credit score, specialists claim that after reaching 760 and higher, you are already eligible for the most favorable loan interest rates and conditions. If you go higher it does not mean that you will be given an extra privilege.
Is There Anybody Out There with an 850 Credit Score
This is an excellent FICO score, although it is possible to get an 850 FICO score in the United States. According to FICO, less than 2 percent of consumers have been reported to achieve the perfect 850 credit score. Thus, although it is not very typical, some individuals reach this high-water mark due to the proper and careful management of credit over the years.
To get there, a perfect and lengthy credit record, the right types of credits, a low ratio of balances to credit limits, fewer credit inquiries for new accounts, and no negative credit history such as delayed payments. It is one of the hardest ratings that any candidate can be allowed to achieve.
The Personal Finance and the Perfect 900 Credit Score
Now, as for reaching the ideal 900 credit score – that’s not possible at all according to the FICO system. As said before, FICO scores cannot go beyond 850. Therefore, the combination of a 900 FICO score cannot exist, even in theory, based on the current scoring approach.
Now there are some other, less popular credit scoring models apart from FICO such as XEROX, etc. For instance, the VantageScore also emphasizes credit ratings and scores that lenders can look through. However, even the high range of VantageScore reaches 850, which is identical to the FICO model. Thus, 850 is the highest credit score across the primary credit scoring models.
Why 850 Is Considered the Best Score
FICO scores go from 300 which is the low end to 850 which is the high end. But why was 850 out of 1000 chosen as the range of scores that is potentially achievable? FICO has pointed out that this range was deemed to offer sufficient distinction to ensure that anyone comparing credit scores could swiftly compare customers.
The company looked at thousands of consumers’ credit histories and determined that 300 to 850 points are sufficient to distinguish consumers’ creditworthiness differences. There was not a single instance where two consumers had the same score.
When choosing 850 as the maximum limit, allows for acknowledging perfect credit management while still indicating that there is a possibility of further credit improvement. In other words, no one can be expected to be perfect in credits, so maintaining the top below 900 or 1000 prevents exceptional achievers from clumping at the highest score.
Does Exceeding 850 Matter
The short answer is the fact is that if you have a FICO score above 760 or so, you are already in this excellent credit bracket. You are receiving the best loan rate and loan terms from the lenders at that level. After 760, the advantages of proceeding further are negligible to non-existent at best.
This means however good it is to score an 850, scoring 900 or 950 on theoretical tests will bring you no additional benefit as far as your credit situations are concerned in real life. The lenders do not differentiate between 850 and 900 or between 850 and 800 for that matter.
Just like in a test where you are given a certain number of marks based on your score, here also you are given a certain number of points based on your job. It would be fantastic to strive for 100 percent. If the grading scale goes up to 98 percent for an A+, then achieving 110 percent does not alter the grade that one has already earned. The result of getting over 850 is akin to getting over 100 percent when the highest achievable mark is 98 percent.
Are There Possibilities of Getting 850 Plus
As it has been disclosed above, you can’t achieve 900 or higher on the FICO model setup and still most employed. And it would provide no actual benefits if the new scoring methodology would allow it to do so. However, that has not prevented some other credit score systems from increasing rating scales beyond 850.
For example, a company called Scorelogix came up with a credit scoring model known as JSS Score which varies between 350 and 950 points. So consumers could theoretically go over 850 and even reach the 900s. However, as no lenders seem to employ that scoring system, achieving that goal would still not affect credit decisions in any way.
As long as conventional models such as FICO do not widen the rating limits any further, which appears to be redundant, 850 will remain the highest. Anything beyond that point is just boasting and has no bearing on the usability of the device.
The Takeaway
It should be noted that the maximum score that can be achieved under the FICO system is 850. FICO credit scores were intentionally capped at 850 points to provide proper variation between people’s credit profiles. Only a small portion of the populace can achieve the 850, to begin with, so there is no purpose in going above it and it is unnecessary for the rating system.
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