What really happens when your credit score hits the mythical 850?
At a Glance
- A perfect 850 credit score is more of a status symbol than a financial necessity.
- Scores above 800 already unlock all top-tier benefits.
- Only 1.6% of U.S. consumers achieve a perfect 850 score.
- Older consumers dominate the perfect-score demographic.
The Elusive 850 Credit Score
In the world of credit scores, an 850 is like Bigfoot—often talked about, rarely seen. The FICO® Score, introduced in 1989, has become the gold standard in lending decisions, with scores ranging from 300 to the elusive 850. But, much like the pursuit of a perfect beach body, the quest for an 850 score is more about bragging rights than actual necessity.
In 2024, the average FICO® Score in the U.S. is a respectable 714, with only a tiny 1.6% of consumers achieving the magical 850. Despite its mythical status, experts affirm that scores above 800 are virtually identical in benefits, offering the best loan terms and lowest interest rates.
Who Are the Lucky Few?
So, who are these unicorns with perfect scores? Turns out, they’re more likely to be your parents or grandparents. A whopping 66% of those with an 850 score are baby boomers, with Gen Xers making up 26%. Millennials and younger? Less than 8% make the cut. The secret sauce? Near-zero credit utilization, no missed payments, and credit histories longer than some marriages.
Having an 850 score might give you a warm, fuzzy feeling, but the practical advantages over an 800+ score are minimal. FICO and credit bureaus have repeatedly stated that scores above 800 are sufficient for all lending decisions.
The Practical Reality
For most of us mere mortals, maintaining a score above 800 is the real goal. This range secures nearly all the financial perks one could dream of, from lower borrowing costs to quicker loan approvals. The focus has shifted from perfection to excellence—ensuring financial flexibility without the stress of chasing a perfect score.
But don’t let that deter your ambitions. Achieving a perfect score can still provide a psychological boost and, if you’re lucky, some extra negotiating power with lenders. Just remember, the difference in practical benefits is akin to the difference between a brand-new Ferrari and one with a few thousand miles on it.
The Bigger Picture
Economically, high credit scores can reduce borrowing costs, potentially leading to increased consumer spending and investment. Socially, however, the pursuit can exacerbate financial anxiety and reinforce disparities, as older, wealthier consumers are more likely to hit perfect scores.
The credit industry continues to promote responsible credit use, yet it faces scrutiny over the opacity and rigidity of scoring models. While striving for the perfect score can motivate responsible behavior, it’s essential to keep perspective and focus on broader financial goals like building savings or reducing debt.
