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When Does Your Credit Score Stop Mattering?

You have probably heard about the importance of a strong credit score throughout your adult life, or even starting as early as childhood. However, amid all the hype, you may wonder how high your credit score really must be.

Credit scores typically range on a scale from 300 to 850 and having a credit score of 760 or above is considered excellent. A credit score of 750 will allow you to qualify for the lowest interest rates across most, if not all, sectors.

Although it is impressive to have a perfect credit score of 850, it is not necessary to receive all the benefits included with a high credit score.

Do You Need a Credit Score Above 700?

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Many people consider 700 to be a solidly good credit score. Although this is true, a credit score of 700 is not exceptional. Once you have a credit score of around 750 or above, you are in the “excellent” range.

Keep in mind that 760 is just a general average across markets. Before taking out a loan or mortgage, ask the lender what their definition of an excellent score is, and then adjust your score as needed.

Having an excellent credit score is crucial if you look to get the most out of your investments and get easy approval for big purchases in life.

Why Is a Good Credit Score Important?

You may know that it is vital to have a good credit score, but why is this the case? Having a high credit score leads to the following benefits:

  • Likelier approval on loans for cars, homes, or other large purchases
  • Lower interest rates on loans
  • Approval for leases on certain apartments
  • Approval for new credit cards

All these benefits occur in areas that are very important to have a comfortable and fulfilling life. Debt can cause stress and financial hardship and keeping a good credit score will positively impact your financial security.

What Is the Difference Between a Good Credit Score and a Great One?

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If your credit score is hovering around the 700 mark, you have probably wondered if this is good enough.
While you are likely benefitting from your good credit score, increasing your score to 750 can make a difference in your financial wellbeing.

Having a credit score in the excellent range will allow you to qualify for lower interest rates and more approvals than you would receive with a credit score in the good range. Although the difference may seem as small as a few fractions of a percentage point on an interest rate, this can quickly add up.

If you hope to be as financially savvy as possible, you should aim to have an excellent credit score.

Do I Need a Perfect Credit Score?

Considering the benefits of having an excellent credit score, it is easy to see why some think you need to have a perfect score to be financially successful.

However, having a perfect credit score of 850 is often not attainable, nor is it necessary.

Most lenders and creditors view credit scores in brackets. If you meet the requirements for an excellent credit score bracket, it won’t matter if your score is 750 or 850. You will be considered an excellent candidate for loans or rent approval and receive the same benefits as someone with a perfect score.

Additionally, having an 850 credit score is a goal that few people can attain. A credit score like this means that you have not made any mistakes throughout your time with your credit card. Considering that most people start a line of credit at a young age, it is normal for most people to make small mistakes here and there.

Do not be too hard on yourself if your credit score is not perfect. You can still aspire to have an excellent credit score without it being perfect and receive the same benefits as the rare individual who has never made a small financial mistake in their life.

How Can I Improve My Credit Score?

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If you are hovering at the “good” score range or lower and want to improve to “excellent,” there are many steps you can take to increase your score.

Pay Bills on Time

One of the most common ways that people end up with a poor or average credit score is that they are not timely in paying their bills. Be mindful of when your bills are due, and make sure that your bills are paid exactly when they are due. Even a day or two late can have an impact on your credit score.

With more bill-paying services moving online, it is increasingly easy to make sure that your bills are paid. Set reminders on your phone or in your calendar to know when it is time to make a payment.

As you meet more and more of your deadlines, you will notice your credit score improving as a result.

Pay Off Debts and Loans

Accumulating debts can harm your credit score. So, whether your debts are on your credit card or take the form of a mortgage, student loans, or car payments, it is essential to make payments when you need to and work hard to cut down your debts—check here for more information.

If you can do it financially, dedicate some of your savings each month toward paying off debts or loans you have.

Debts are not uncommon, but they can get in between you and your goal of an excellent credit score.

Lower Your Credit Card Balance

A frequent mistake with credit cards is charging too much to your card. Many experts suggest charging only as much as 30 percent of your credit limit to your card each month. However, if you fulfill all or nearly all your credit limits each month, this is a sign to lenders and creditors that you struggle to manage money.

If you struggle to pay all your living expenses without exceeding the 30% limit on your card, it may be wise to open a new credit card. Not only will this help you keep your credit card balances low, but multiple lines of credit can improve your score, too, as this is an indicator of fiscal responsibility.

However, any time you open a new line of credit, make sure that you have the finances and the organization necessary to continue paying bills on time.

When Can You Stop Paying Attention to Your Credit Score?

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Once you have your score in the excellent range, you should still be mindful of your credit score. Of course, it can be a relief to know that you have an excellent score, but fiscal responsibility means that you are always aware of your finances.

Ease your mind by continuing all your responsible habits under the knowledge that your credit score is healthy. First, however, continue doing yearly credit score checks to make sure that you continue to be on the right track.
The most financially successful people are always aware of their finances, even if they are not stressed or hyper-focused on them.

Conclusion

All the hype about credit scores carries some truth. Your credit score is critical and can impact your financial security throughout your adult life. However, if your credit score is in a range considered excellent, you can take comfort in the knowledge that you will receive the best benefits for loans.

Practice responsible credit habits and speak to lenders to get a sense of their definition of an excellent credit score.
Odds are, you will probably not have to worry too much about your credit score if it is 760 or higher. This will get you the same benefits as a perfect credit score, and you will be considered an excellent candidate for loans.

If your credit score is not where you want it to be, do not be discouraged. Building a credit score takes time, but it will be worth it when you get there and can relax with the knowledge that you qualify for numerous benefits. Fiscal responsibility takes time and practice to achieve and can enhance any lifestyle.