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While having a low credit score definitely affects your ability to qualify for loans at reasonable rates, the upper range of your credit score doesn’t really matter as much. In fact, trying to boost your score beyond a certain range is pretty much a waste of time if you’re trying to snag the best interest rates.
Anything above a credit score of 760 doesn’t really matter
It’s easy to obsess over your credit score, but you only really use it when you’re applying for credit, like when you want to finance a house or a new vehicle. That doesn’t mean credit scores don’t matter, of course, as a lower interest rate can mean saving thousands of dollars on interest payments alone. But it’s important to keep your credit score in perspective, especially if you already have good credit habits and pay your debts on time.
In fact, a FICO score higher than 760 doesn’t really matter to lenders, as anything beyond that will already qualify you for the lowest rate possible—what lenders call their “prime rate.” As financial expert John Ulzheimer explains to CNBC, “The best published interest rates for auto loans are 720-plus and for mortgages, 760-plus. As such, I always tell people, shoot for 760 or better. That way, they’re safe for all loan types and cards.”
How to nudge your score up to 760
People with excellent credit scores share the same habits. These include:
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For more actionable tips on improving your credit score, check out this Lifehacker post.