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Few Americans Have Perfect Credit Scores. Experts Say You Don’t Need One
By Liliana Hall MONEY RESEARCH COLLECTIVE
Perfect 850 credit scores are extremely rare. However, experts say you don’t need one.
A perfect credit score might sound like the ultimate financial goal. But a very small percentage of Americans actually have one.
According to a spokesperson for credit reporting agency Equifax, just 0.24% of U.S. adults with a credit file — roughly 2 out of every 1,000 people — have a perfect 850 credit score using the VantageScore 4.0 model. At the same time, about 53% of consumers fall within the model’s “super-prime” range of 720 to 850.
The top of most credit scoring scales, which typically range from 300 to 850, is reserved for folks with near-perfect credit habits, including years of on-time payments, low credit card balances and long, well-established credit histories. Consumers with perfect scores also tend to have an above-average number of credit cards, lower credit utilization rates and lower-than-average total debt, according to Experian, another major consumer credit reporting agency.
On average, Americans use about 28% of their available credit card limits, while people with 850 credit scores use just 4%, according to data from Experian.
Maintaining low balances matters because credit utilization accounts for roughly 30% of a FICO score — the credit scoring model used by about 90% of lenders in the U.S. — making it one of the most important factors in the credit-scoring formula. Lower utilization rates signal that a borrower isn’t heavily relying on credit, which lenders generally view as a sign of lower borrowing risk.
Perfect scorers also have no delinquent accounts on their credit reports, meaning they’ve consistently paid their bills on time. By comparison, about 4.8% of U.S. household debt is currently in some stage of delinquency, according to the Federal Reserve Bank of New York’s latest household debt and credit report.
Why you don’t need a perfect 850 credit score
Reaching the maximum credit score is rare — and financial experts say consumers don’t need to chase perfection to access the best borrowing terms.
“It is not necessary to have a perfect credit score to qualify for the best rates when you’re applying for funding, such as a personal loan, a new credit card or even a mortgage,” Leslie H. Tayne, debt expert and founder of Tayne Law Group, tells Money. “A lot of the time, if the consumer has great credit — within the 780 bracket or even higher — they’ll qualify for the best rate a lender offers.”
The average U.S. credit score is about 715, according to FICO data. Although 715 is generally considered “good” as opposed to “very good” or “exceptional,” many borrowers are already within the range lenders typically reserve for their best rates.
“If you look at the best deals by FICO score, you need a 720 to get the best deals on auto loans and 760 to get the best deals on mortgages,” says John Ulzheimer, a credit card expert formerly with FICO and Equifax.
Still, borrowers should aim to improve their credit whenever possible. A higher score can provide a buffer if your credit profile changes — for example, if you temporarily carry higher credit card balances — and help keep your score high enough so you still qualify for favorable rates.
The biggest mistakes people make when trying to improve their credit
For consumers trying to boost their credit scores, experts say the biggest improvements usually come from focusing on long-term habits, not quick fixes. Think: debt repayment, not balance transfers, Tayne says.
Another common misstep is closing older credit accounts, which can actually hurt a borrower’s scores because it may reduce available credit and increase credit utilization.
“It’s ironic in some ways that closing a credit account or even paying off a large revolving debt, like a mortgage or car, can actually hurt your score, but it’s true,” Tayne explains.
If a credit card is no longer useful to you, she says it may be better to keep the account open rather than closing it outright — especially if it doesn’t carry an annual fee.
“The benefit of keeping it open would have to outweigh that fee,” she adds. “However, having a card that you don’t use can contribute to a better debt-to-income ratio as well as your credit utilization percentage.”
Borrowers should also be wary of questionable advice online.
“Improving your credit is not a mystery,” says Ulzheimer. “When I was at FICO, we would tell people the same thing until we were blue in the face: Make your payments on time, stay out of excessive credit card debt and apply for credit sparingly. Lather, rinse, repeat.”
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Liliana Hall is an Austin-based reporter for Money, where she covers a range of topics, including financial news, policy, banking, investing, passive income, financial planning and student loan debt. Passionate about accessibility and financial literacy, she’s dedicated to helping readers navigate the complexities of money management and feel empowered to make informed decisions about their financial futures. Previously, Liliana covered all angles of personal finance as a writer and editor at CreditCards.com, Bankrate and CNET. Before she ever wrote about money, she worked in a handful of newsrooms across Austin, Texas, covering everything from the Texas Legislature to SXSW and the 2019 Men’s NCAA Swimming and Diving Championships. Her work has been featured in The Daily Texan, Austin Chronicle and KUT. A Texas native, Liliana graduated from the University of Texas at Austin with a bachelor’s degree in Journalism. When she’s offline, you can probably find her paddle boarding on Lady Bird Lake, riding her moped around town or reading for her book club.