Who needs perfect? For credit scores, it pays to be in the ballpark

Who needs perfect? For credit scores, it pays to be in the ballpark

01.31.2025

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Who needs perfect? For credit scores, it pays to be in the ballpark

Precision counts in sports like archery or darts. It might not be as vital for credit scores, where reaching the 800 range or even lower will typically earn borrowers the best rates and terms on credit cards, mortgages, and other loans.1

The most popular models, FICO and VantageScore, assign credit scores from 300 to 850. The average FICO credit score in 2024 was 717, which qualifies as “good credit.”2 The average VantageScore was 702, which counts as “prime credit” under its scoring system.3

The scores have long been used as a measure of financial health and creditworthiness, especially FICO stores. About 24% of Americans have FICO scores between 800 and 850, which is regarded as “exceptional credit.”4

Read more: What is the average credit score? See how you compare

Getting there 

Borrowers shouldn’t fret if they haven’t reached 800. Financial professionals say credit scores in the high 700s are usually sufficient for applicants to get the best loans and top-tier credit cards.5

Some see 760 as a key threshold for the best mortgages, and even a slightly lower score for the best car loans. Others say that a 780 score will cover borrowers for the best rates on all types of loans.6

FICO and VantageScore keep their algorithms secret, but they do reveal which factors influence credit scores.7 FICO weighs five categories: payment history (35%); accounts owed (30%); length of credit history (15%); credit mix (10%); and new credit (10%).8

The importance of those categories varies by person. For example, scores for consumers with long credit histories are calculated differently than for newer borrowers. Missed payments and other negative items have different impact based on their severity, or how recently and frequently they occur.9

Showcasing scores 

About 1.5% of Americans have achieved perfect 850 credit scores, with the honor going mostly to Baby Boomers and Gen X borrowers with long payment histories.10 But there’s no guarantee that stellar financial behavior will earn the ultimate score.

A Texas man spent five years tinkering with his 840s score — closing cards, adjusting payment dates, and tweaking balances. He hit 850 for several consecutive months by focusing on monthly balances between 0.5% and 1.5% of available credit. But the approach didn’t work all the time and didn’t earn him any extra loan perks.11   

The quest for good scores can begin quite early for some. Parents are starting credit histories for their children by adding them as authorized users to credit cards. Some young adults start out with scores in the 700s when they open their first solo accounts.12

Empower research shows that 24% of Gen Z consumers feel pressure to showcase wealth on social media. But the same might apply to their FICO scores.  

A growing number of singles are posting credit scores on dating sites to attract potential partners.13  Others share their numbers online or in email groups for credit-score competitions, with bragging rights at stake.14

Keeping focus 

Chasing scores isn’t without pitfalls. Borrowers often take out multiple credit cards to improve credit utilization rates, the amount of credit used compared with the total credit available. But they also run the risk of overextending themselves or missing payments.15

Research shows that Gen Z consumers already rely on credit cards more than their Millennial counterparts did at the same age. The average credit card balance for people aged 22-24 is $2,834, a 25% increase from ten years earlier.16

Read more: Gen Z’s passion for plastic: Strategies for dealing with credit card debt

Reducing high card balances and consistently making on-time payments are good ways to raise scores, among other things. Keeping old accounts open will help new borrowers on the path to longer credit histories.17   

Credit scores do have their critics. Some say the models focus too much on borrowing and not enough on good financial habits like eliminating debt or consistently paying monthly bills.18 Non-debt factors like paying rent or utilities on time influence scores slightly, but a missed card payment of more than 30 days can ding a score by 100 points.19

But there’s hope for most borrowers who’ve made mistakes. The 760 benchmark is seen as attainable for most Americans, given enough time and financial vigilance.20

Get financially happy.

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1 Yahoo! Finance, “Money expert says Americans who obsess over an 800 credit score are ‘crazy,’” August 2024.

2 FICO Blog, “Average U.S. FICO® Score stays at 717 even as consumers are faced with economic uncertainty,” October 2024.

3 VantageScore, “Are Consumers Using Credit More Cautiously? December 2024 CreditGauge,” accessed January 2025.

4 FICO Blog, “Average U.S. FICO® Score stays at 717 even as consumers are faced with economic uncertainty,” October 2024.

5 CNBC, “The perfect credit score is an 850 — but experts say this is the number to aim for,” November 2024.

6 CNBC, “The perfect credit score is an 850 — but experts say this is the number to aim for,” November 2024.

7 Business Insider, “How your credit score is calculated,” July 2024.

8 MyFICO, “What's in my FICO® Scores?” accessed January 2025.

9  MyFICO, “What's in my FICO® Scores?” accessed January 2025.

10 Experian, “How Many Americans Have a Perfect 850 Credit Score?” May 2024.

11 Wall Street Journal, “One Man’s Attempt to Get a Perfect 850 Credit Score,” January 2025.

12 Wall Street Journal, “They Turned 18 and Immediately Had a Credit Score Over 700,” July 2024.

13 Wall Street Journal, “Hey Baby, Can I Get Your Number? And by That, I Mean Your Credit Score,” August 2024.

14 Wall Street Journal, “Getting Into the 800 Credit Score Club Is Tough — Staying in Is Tougher,” March 2019.

15 Equifax, “How Many Credit Cards Should I Have?” accessed January 2025.

16 TransUnion, “Gen Z Consumers Are Using Credit More, and Differently, than Their Millennial Counterparts at the Beginning of their Credit Journeys,” May 2024.

17 Yahoo! Finance, “Money expert says Americans who obsess over an 800 credit score are crazy,” August 2024.

18 Financial Times, “Credit scores are hazardous to your financial health,” January 2025.

19 Financial Times, “Credit scores are hazardous to your financial health,” January 2025.

20 Yahoo! Finance, “Money expert says Americans who obsess over an 800 credit score are ‘crazy,’” August 2024.

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The Currency editors

Staff contributors

The CurrencyTM, a publication from Empower, covers the latest financial news and views shaping how we live, work, and play. We keep you current on ways to plan, save, and invest for life.

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