What is a good credit score worth? A strong credit score is something that may make your life much easier, as you probably already know if you’re reading this. It can assist you in obtaining approval for loans, credit cards, and possibly housing or employment. Yet the actual question is: How high should your credit score be? Does it make sense to strive for the elusive 800+ credit score that so many people desire?
What an 800 Means
Let’s start by discussing what an 800 credit score actually signifies. Simply put, it indicates that your credit is outstanding. A score of 800 or higher places you in the top 20% of all credit scores, according to FICO, the firm that creates the most widely used credit ratings. Given that the average credit score in the United States is approximately 710, that is undoubtedly something to be proud of.
The Benefits
What are the advantages of having a credit score of 800 then? First off, it will be simpler for you to get authorized for credit cards and loans with the finest conditions and interest rates. As landlords frequently utilize credit scores as a tool to check potential tenants, you might also be more likely to be approved for apartments or rental properties. Also, having a good score can help you if you’re looking for work because some businesses check credit scores as part of the recruiting process.
Are The Time and Effort Worthwhile?
The fact is, though, that not everyone should pursue a credit score of 800. There are many people who succeed with scores in the 700s, but getting that high can require a lot of time, effort, and even money. However, there is no assurance that you will be accepted for every credit card or loan you apply for, even if your credit score is 800. A high credit score is just one aspect of the decision-making process for lenders; other considerations include your income and debt-to-income ratio.
Stress and Your Credit Score
Not to mention the stress that can result from worrying excessively about your credit score. Regularly checking your score and keeping an eye out for changes can be a positive habit, but it can also cause stress and unneeded worry. It’s crucial to keep in mind that your credit score is only one aspect of your total financial picture and that obsessing over it could cause you to neglect other crucial objectives, such as saving money or making investments for your retirement.
Therefore, should you strive for a credit score of 800? In the end, it will rely on your financial circumstances and personal ambitions. By all means, try for an 800 or above if you have the time, resources, and drive to do so. It’s a fantastic accomplishment that may provide you access to some of the best credit options available.
It Isn’t Always Needed
Don’t worry, though, if the thought of spending hours scrutinizing your credit report and adjusting your credit utilization rate doesn’t sound like your idea of fun. You should have access to the majority of the same credit products as someone with an 800 credit score as long as you have good credit, which is generally defined as anything over 700.
Nevertheless, keep in mind that credit ratings are not everything. Although it’s crucial to have good credit, it only makes up a small part of your entire financial picture. Be sure to concentrate on other things as well, such as increasing your emergency fund, making investments for the future, and eliminating any high-interest debt you may have.
In ConclusionÂ
While achieving an 800 credit score may be desirable for some individuals, it is not necessary for everyone to do so. You should be alright as long as your credit score is high and you are handling your money appropriately. Who knows, you might even be able to laugh at some of it.