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Seriously, Is There a Difference Between a 700+ Credit Score & a 800+ Score?

Christine DiGangi

With some of the most common credit score models, an 850 is the best you can get. Sometimes, people get really hung up on that "perfect" score, agonizing over every point change, even if their scores are in the low 800s or high 700s.

Credit scoring involves more than numbers; there are also ranges. For example, a 780 and an 820 are both considered excellent credit scores (this is true among many FICO models and the VantageScore 3.0 model, both of which lenders use to evaluate borrowers). Think of it like your school days: While getting 95% of questions right may not seem as good as getting 100% correct, both scores are probably considered As, or a 4.0 on most grade point average scales. A student who consistently gets 95% of test answers right could end up with the same GPA as someone who always gets 100% right. Sure, it feels good to get a 100%, but is it crucial to making the honor roll? No.

With credit scoring, there's nothing wrong with trying to get the best credit score you can, but realize that once you fall into that "excellent credit" range, your precise score may not make much of a difference in your ability to qualify for credit and low interest rates on loans. (You can figure out the "good credit score" range here.)

The loan-level price adjustment matrix published by Fannie Mae is a good example of this: It shows how lenders tend to increase or decrease interest rates based on an applicant's credit score and loan-to-value ratio. The higher your down payment and the higher your credit score, the lower your mortgage rate is likely to be. The table breaks down how different credit scores can affect your mortgage rate.

But the highest that table goes is a 740 credit score. Once you've achieved such a high score, you're not seen as much of a lending risk as someone whose score is in the 800s. The reason you may want to aim for as high a score as possible is because scores fluctuate often, so if you're borderline — say, in the 740s — a small change in your credit information or the use of a slightly different scoring model than what you've been looking at could knock you down into a lower credit tier. As a result, you may end up paying a higher interest rate.

You can see how much you can save with a higher credit score by using our Lifetime Cost of Debt calculator — you'll notice the highest credit score range you can use is 740 or higher, because data shows that people with scores in that range qualify for the best interest rates. Again, because scores fluctuate often, it's important to check your credit scores so you notice if something is dragging it down, like a missed payment or high credit card balances. You can see your credit scores for free every 30 days on Credit.com.

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