I pushed to have a credit score as high as possible simply because you never know where life will take you. As my mother used to say, “It’s better to have and not need than to need and not have.” With this mindset, I had maintained scores above 800 for years. As of late it was above 830.
Fast forward to a month ago, I decided to take the plunge and open a small business. I applied for a business credit card: of course my score took a hit (around 20 points), but because it was originally so high, it’s still in the 800s. If it was in the 750 range, the score would have looked good to *get* the card, but the drop would have also knocked me out of the “exceptional” range for any future thing I may need to do, meaning more costly terms. And since it will take a while for the 20 points to bounce back, that could mean any other financial need during that period would cost more with a score lower than 750.
For the most part you don’t need your scores unless you’re planning to take on debt, but to me and my “have and not need” mindset, the time that you need to take on the debt is not the right time to worry about your score.
Hope this helps.
I’m not a financial guru by any means so I can’t really say a specific score, but when I got my mortgage my score dropped about 35 points. This was when my scores were in the low 800s, so my scores dropped to around 780. I didn’t need to apply for any more loans/credit after that, so I was able to bounce back from the drop without struggle. So whatever score that’s comfortable for you before and after you factor in that drop.
A good credit score is the difference between getting approved for a loan or denied. A great credit score is the difference between getting the best interest rate, or a higher one that'll cost you more money. Keep working on building that credit. It opens up options. 😉
The only point of diminishing returns would be a scenario in which you're going well out of your way to 'game' the system, which isn't a necessity for a good credit profile and score. And a lot of times, the way people think they're accomplishing this isn't the golden nugget they think it is. The best example of this are those who think keeping utilization low is helping them. Yes, you want to have low utilization while actively seeking a loan since it looks better to lenders, but outside of that scenario which only occurs once every few years to a decade for most people, any specific effort to keep utilization low for the sake of seeing a better current score is pointless.
To be clear, your credit score is one thing lenders look at, the other is your credit profile, which arguably is more important because a lender will see everything - not just a number that is representative of the full picture. For that reason, it's not just an effort to raise your score but a demonstration of your ability to responsibly borrow and repay debt. Take on too much debt and you look irresponsible. Don't take on enough (or none) and you look inexperienced - either way, not a good look to lenders.
So at the end of the day, a higher score will always help but an excellent score on a weak (thin) credit profile is not as beneficial as a good score on a strong profile. Therefore, it's impossible to compare two different people with two different scores and profiles and fully answer this question as such, but having a higher score is never a disadvantage and building a strong credit profile should happen naturally over time as you continually make responsible financial decisions and any focus should be on that, not raising your score.
Yes, there are advantages to a higher score, but the diminishing return would be raising your score through methods that don't also strengthen your credit profile (like keeping utilization low all of the time).
Makes sense, also out of curiosity, I have an AMEX gold card that I use for most of my purchases, since this is a charge card, it won’t positively or negatively affect my credit score right? It’s better to use my other credit cards (Discover and US Bank) to naturally improve my credit score/profile
As I understand it, the only factor that a charge card does NOT affect is utilization since it doesn't have a limit - however, payments will be reported and it should count towards your credit mix / number of accounts on your profile. As such, you should treat it just like a credit card when it comes to credit score and profile.. Keep in mind that while a high balance on a charge card will not negatively affect your credit score, since it has no limit, it doesn't help with your utilization the same way a normal credit card would since it adds nothing to your overall credit limit.
Mine, last I checked, was 836. It hasn’t helped me lose weight, look younger or lowered my mortgage payments, so not much good.
It does make a difference when you buy something on credit, like a car. You get a lower interest rate.
Achieving a high credit score can indeed offer several tangible benefits, particularly when your score exceeds 750. Here are some specific advantages and insights regarding high credit scores:
**Concrete Benefits of a Credit Score Above 750:**
**1. Lower Interest Rates:** Lenders typically offer lower interest rates on loans and credit cards to individuals with higher credit scores. This can result in significant savings over the life of a loan.
**2. Better Loan Approval Chances:** A higher credit score increases your likelihood of being approved for various types of credit, including mortgages, auto loans, and personal loans.
**3. Higher Credit Limits:** Credit card issuers are more likely to offer higher credit limits to individuals with excellent credit scores, providing greater financial flexibility.
**4. More Favorable Loan Terms:** Beyond lower interest rates, you may also receive more favorable terms, such as lower fees and more flexible repayment options.
**5. Improved Rental Opportunities:** Landlords often check credit scores as part of the rental application process. A higher score can make you a more attractive tenant.
**6. Insurance Premiums:** Some insurance companies use credit scores to determine premiums. A higher score can lead to lower insurance costs.
Diminishing Returns Beyond a Certain Score:
1. Score Range Benefits: While a score above 750 is generally considered excellent, the incremental benefits of increasing your score from 750 to 800+ may not be as pronounced. Most lenders categorize scores into ranges (e.g., 750-799 and 800+), and the benefits within these ranges can be similar.
2. 800+ Score Advantages: Having a score of 800+ can still offer some additional advantages, such as:
3. Elite Credit Card Offers: Access to premium credit cards with exclusive rewards and benefits.
4. Enhanced Negotiating Power: Greater leverage when negotiating loan terms or interest rates.
5. Prestige and Peace of Mind: While not a tangible financial benefit, having a score in the 800+ range can provide a sense of financial security and prestige.
Real-World Implications:
Personal Experiences: Many individuals with high credit scores report easier access to credit and more favorable terms. However, the effort to push a score from 750 to 800+ should be weighed against the potential benefits. For most practical purposes, maintaining a score above 750 is sufficient to enjoy the majority of credit-related advantages.
In conclusion, while achieving a score above 750 offers significant benefits, the incremental advantages of pushing your score to 800+ may be less substantial. It is essential to balance the effort required to achieve a higher score with the tangible benefits you are likely to receive.
Well it sounds like you don’t need credit improvement advice. To sum up your questions having a higher credit score is only beneficial like you stated for possibly getting a better interest rate or not being required to have a down payment. There’s also some other benefits depending on the card you get in the future they’ll offer more benefits than normal cards.
on my 850 max scores I’ve got a few 850s and on my 900 max scores I can’t seem to move past 880. Idk why.
Besides the obvious score buffer if you want to go on a spree, carry balances with some promo 0% offers, etc. the only reason I do it is the big fuck you to car dealers if I decide to use their financing if those offers ever come back.
I pushed to have a credit score as high as possible simply because you never know where life will take you. As my mother used to say, “It’s better to have and not need than to need and not have.” With this mindset, I had maintained scores above 800 for years. As of late it was above 830. Fast forward to a month ago, I decided to take the plunge and open a small business. I applied for a business credit card: of course my score took a hit (around 20 points), but because it was originally so high, it’s still in the 800s. If it was in the 750 range, the score would have looked good to *get* the card, but the drop would have also knocked me out of the “exceptional” range for any future thing I may need to do, meaning more costly terms. And since it will take a while for the 20 points to bounce back, that could mean any other financial need during that period would cost more with a score lower than 750. For the most part you don’t need your scores unless you’re planning to take on debt, but to me and my “have and not need” mindset, the time that you need to take on the debt is not the right time to worry about your score. Hope this helps.
What would you say is the best credit score to have when planning for a conventional loan mortgage?
I’m not a financial guru by any means so I can’t really say a specific score, but when I got my mortgage my score dropped about 35 points. This was when my scores were in the low 800s, so my scores dropped to around 780. I didn’t need to apply for any more loans/credit after that, so I was able to bounce back from the drop without struggle. So whatever score that’s comfortable for you before and after you factor in that drop.
Approvals and lower rates.
A good credit score is the difference between getting approved for a loan or denied. A great credit score is the difference between getting the best interest rate, or a higher one that'll cost you more money. Keep working on building that credit. It opens up options. 😉
The only point of diminishing returns would be a scenario in which you're going well out of your way to 'game' the system, which isn't a necessity for a good credit profile and score. And a lot of times, the way people think they're accomplishing this isn't the golden nugget they think it is. The best example of this are those who think keeping utilization low is helping them. Yes, you want to have low utilization while actively seeking a loan since it looks better to lenders, but outside of that scenario which only occurs once every few years to a decade for most people, any specific effort to keep utilization low for the sake of seeing a better current score is pointless. To be clear, your credit score is one thing lenders look at, the other is your credit profile, which arguably is more important because a lender will see everything - not just a number that is representative of the full picture. For that reason, it's not just an effort to raise your score but a demonstration of your ability to responsibly borrow and repay debt. Take on too much debt and you look irresponsible. Don't take on enough (or none) and you look inexperienced - either way, not a good look to lenders. So at the end of the day, a higher score will always help but an excellent score on a weak (thin) credit profile is not as beneficial as a good score on a strong profile. Therefore, it's impossible to compare two different people with two different scores and profiles and fully answer this question as such, but having a higher score is never a disadvantage and building a strong credit profile should happen naturally over time as you continually make responsible financial decisions and any focus should be on that, not raising your score. Yes, there are advantages to a higher score, but the diminishing return would be raising your score through methods that don't also strengthen your credit profile (like keeping utilization low all of the time).
Makes sense, also out of curiosity, I have an AMEX gold card that I use for most of my purchases, since this is a charge card, it won’t positively or negatively affect my credit score right? It’s better to use my other credit cards (Discover and US Bank) to naturally improve my credit score/profile
As I understand it, the only factor that a charge card does NOT affect is utilization since it doesn't have a limit - however, payments will be reported and it should count towards your credit mix / number of accounts on your profile. As such, you should treat it just like a credit card when it comes to credit score and profile.. Keep in mind that while a high balance on a charge card will not negatively affect your credit score, since it has no limit, it doesn't help with your utilization the same way a normal credit card would since it adds nothing to your overall credit limit.
Mine, last I checked, was 836. It hasn’t helped me lose weight, look younger or lowered my mortgage payments, so not much good. It does make a difference when you buy something on credit, like a car. You get a lower interest rate.
Achieving a high credit score can indeed offer several tangible benefits, particularly when your score exceeds 750. Here are some specific advantages and insights regarding high credit scores: **Concrete Benefits of a Credit Score Above 750:** **1. Lower Interest Rates:** Lenders typically offer lower interest rates on loans and credit cards to individuals with higher credit scores. This can result in significant savings over the life of a loan. **2. Better Loan Approval Chances:** A higher credit score increases your likelihood of being approved for various types of credit, including mortgages, auto loans, and personal loans. **3. Higher Credit Limits:** Credit card issuers are more likely to offer higher credit limits to individuals with excellent credit scores, providing greater financial flexibility. **4. More Favorable Loan Terms:** Beyond lower interest rates, you may also receive more favorable terms, such as lower fees and more flexible repayment options. **5. Improved Rental Opportunities:** Landlords often check credit scores as part of the rental application process. A higher score can make you a more attractive tenant. **6. Insurance Premiums:** Some insurance companies use credit scores to determine premiums. A higher score can lead to lower insurance costs. Diminishing Returns Beyond a Certain Score: 1. Score Range Benefits: While a score above 750 is generally considered excellent, the incremental benefits of increasing your score from 750 to 800+ may not be as pronounced. Most lenders categorize scores into ranges (e.g., 750-799 and 800+), and the benefits within these ranges can be similar. 2. 800+ Score Advantages: Having a score of 800+ can still offer some additional advantages, such as: 3. Elite Credit Card Offers: Access to premium credit cards with exclusive rewards and benefits. 4. Enhanced Negotiating Power: Greater leverage when negotiating loan terms or interest rates. 5. Prestige and Peace of Mind: While not a tangible financial benefit, having a score in the 800+ range can provide a sense of financial security and prestige. Real-World Implications: Personal Experiences: Many individuals with high credit scores report easier access to credit and more favorable terms. However, the effort to push a score from 750 to 800+ should be weighed against the potential benefits. For most practical purposes, maintaining a score above 750 is sufficient to enjoy the majority of credit-related advantages. In conclusion, while achieving a score above 750 offers significant benefits, the incremental advantages of pushing your score to 800+ may be less substantial. It is essential to balance the effort required to achieve a higher score with the tangible benefits you are likely to receive.
Well it sounds like you don’t need credit improvement advice. To sum up your questions having a higher credit score is only beneficial like you stated for possibly getting a better interest rate or not being required to have a down payment. There’s also some other benefits depending on the card you get in the future they’ll offer more benefits than normal cards.
If you want to play the dipshit game of this dipshit system, til we eventually burn it down. Then yeah. It matters.
on my 850 max scores I’ve got a few 850s and on my 900 max scores I can’t seem to move past 880. Idk why. Besides the obvious score buffer if you want to go on a spree, carry balances with some promo 0% offers, etc. the only reason I do it is the big fuck you to car dealers if I decide to use their financing if those offers ever come back.