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What is the best credit score?

The answer may depend on the scoring model and purpose of your score. Here's how to sort it all out and figure out where you stand.

By Credit.com Feb 3, 2014 12:14PM

This post comes from Gerri Detweiler at partner site Credit.com.


Credit.com on MSN MoneyIf you were to ask me, “What is the best credit score?” – and I get that question a lot – I would turn around and ask you a question: “Why do you want to know?”


Credit card © Fancy, Veer, CorbisMy answer to your question would depend on your answer to mine. That’s because I have found there are a couple of different reasons why people ask about the best credit score.


Reason No. 1: I want to be the best

Some people ask this question because they want to know the "highest credit score" so they can strive for that number


(Or they at least want to know whether they are in the ballpark.)


Let’s put aside the fact that striving for a perfect credit score is an exercise in futility for a moment.


Instead, let’s focus on the fact that there are different credit score ranges for different scoring models. For example, here are a few score ranges:

  • FICO Score: 300 – 850
  • VantageScore (versions 1.0 and 2.0): 501 – 990
  • VantageScore 3.0: 300 – 850
  • Experian National Equivalency Score: 360 – 840
  • PLUS Score: 330 – 830

As you can see, the “best” or highest score depends on the credit scoring model being used.

But the more important thing to keep in mind here is the fact that lenders are also typically looking at a range of scores when approving applications or setting rates. For example, one lender might offer applicants with a score of 760 or higher the best rate. Another lender might extend that range down to 720. Since it’s impossible to know each lender’s parameters, focus instead on whether your score tends to be on the high side or not.


If it gets you what you want, then why worry about it? If not, you’ve got some work to do to improve your credit score


Reason No. 2: I want to get the best

Other consumers ask this question because they want to know if a score from a particular company is better than others, so they can check theirs with that provider. This is also another tough one to answer specifically, since there are dozens of credit scores used by lenders and insurers.


If you really wanted to drill down to figure out which score is the greatest, you would have to look at:

  • The credit scoring model. Here you’d have to look at which company supplies the credit score (FICO or VantageScore, for example) as well as which version of their score is being used. Of course, companies that develop scores are going to make a case as to why theirs are better than the competition’s.
  • The credit reporting agency. Credit scores are calculated using credit report information from the major credit reporting agencies: Equifax, Experian and TransUnion. Of course each of these companies will say that their credit data is better (more accurate, complete etc.) than their competitors'.

Lenders who use credit scores invest a lot of time and money choosing and evaluating the credit information they use to make lending decisions. The fact that they don’t all use a single credit score, or even one scoring model exclusively, tells us something: There is no one that’s better than all others, and some are better for certain purposes than others.


Where does this leave you, as a consumer who wants to make sure your credit is strong?

First, you won’t have any idea of how your credit scores compare to other consumers' unless you see yours. So get them. You can use a tool like Credit.com's free Credit Report Card to get two free credit scores each month. You may also have access to a score through one of your credit card issuers or financial institutions. Don’t limit yourself to a single source. Instead, review yours every opportunity you get.


Also review your free annual credit reports at least once a year. If the information in your reports is wrong, your scores won’t be accurate. They go hand-in-hand.


Secondly, don’t obsess over a specific number. Instead, take a look at what’s strong, and what areas need some work. If there is something you can do about it (such as disputing a mistake, or paying down a credit card that’s near the limit) do that. Otherwise, you may just have to continue to pay your bills on time and wait for some of the not-so-positive information to get older.


For some people, having a top credit score seems effortless, while for others it takes some effort. But if you want to the best, sometimes you have to work for it.


More from Credit.com:




47Comments
Feb 3, 2014 3:06PM
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Dont start believing that a really good credit score will automatically end up with a good loan or refinance. My score has been over 800 for a long time...and yet Wells Fargo has nitpicked and delayed to the point that I have given up on them. Their theory seems to be that everyone deserves to be treated like a criminal....
Feb 3, 2014 3:19PM
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Credit scores are a joke.  It is all about your credit history.  You could have a 800+ score and get turned down on a loan.  If you do not have major loan (not student loan) in your history with a good track record then the odds of you getting a new loan with great rates are lower.  Credit cards can effect your credit score in a major way, but carry little impact as far as credit history.  The whole system is messed up if you ask me.
Feb 3, 2014 3:59PM
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not only is a credit score taken into account but more importantly its income to debt ratio for a loan .
Feb 3, 2014 3:47PM
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RED FLAG AMERICA - - - Credit Scoring Agencies are FOR PROFIT companies. The scoring models are skewed in favor of the lender. The banks want to maximize profits. Can you imagine if a non-profit company ran the scoring models? Can you imagine if the banks had to abide by them? The banks are in bed with the credit scoring agencies. If the scores were more fair to the consumer, the interest rates would have to drop and profits would go down. Banks would have to tone down the $15 million dollar bonuses they easily give out. America would have more money each month to spend on discretionary items and business would hire more people,...see where this is all going? This is like the Twilight Zone episode where the Americans finally figure out that the "book" is really a cook book. No-one "approved" the scoring models,...they just found their way into our economy. Go to the FICO website and look at their company history.
Feb 3, 2014 3:55PM
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All of us older folks remember the adage "Garbage in = Garbage out"  credit scores are nothing more or less..... 
Feb 3, 2014 5:24PM
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A good credit score is why I was able to get a new car at 0% for 5 years, instead of the advertised 4 and why we were able to refinance the house to a 15, despite a 40% income drop.  Past history is the best predictor of the future.
Feb 5, 2014 12:52PM
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i agree with news or not ,my score is also over 800 and my bank wouldnt even talk to me about refinancing to a lower interest rate. i had always been on time with my home loan , was not underwater and paying 5.75% interest. all i wanted was a lower interest rate and they did everything they could to prevent me from doing a refi. i moved my business to a credit union. i didnt want to leave the bank i had been at for many years but when they treated me like crap even though i have a great score and always pay bills on time , then its time to move on. 
Feb 4, 2014 11:40PM
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I had to laugh.  No debts....... and I guess that's my problem.  I have credit cards that get paid each month, if I use more than one.  But I suppose I am old, don't have a mortgage.  If I want something, I pay for it, so it does not get the highest score but it is still over 800 so I am OK with it.(Do I have a choice?).  All I cared about knowing about the score is for my car/home/health insurance.
Feb 3, 2014 7:05PM
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Went to a Credit Union...and NEVER went back!
Feb 3, 2014 6:27PM
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Banks aren't on my favor lists. They are too money hungry. That's exactly why I do business with the credit unions. They aren't like Wells Fargo and maybe a few other banks out there. At credit unions, you are treated like a member and not like a customer and the rates are better too. I will never do business with a bank ever again. Good credit is a must along with not being in so much debt. My plan is to owe only on my home mortgage by the end of the year since I am retiring next year. That will shoot my credit up to a near excellent credit rating. Good credit rating plus very low debt and a steady income is all it takes. But, that takes some sacrificing and lot of will power to achieve that.
Feb 3, 2014 3:59PM
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Not sure what mine is, but when I was applying for a mortgage in 2001. The officer punched in some #'s and hit enter. We talked a bit and the computer spit out the info he wanted. He seemed to be rattled and I asked him what was wrong? His reply, "I have been doing this for 15 years and I have never seen a credit score this high before." That made me feel pretty good.
Feb 3, 2014 7:03PM
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"Credit Score" = the only "pass"-"fail" grade you may ever have that is already calculated before you answer the questions on the test - the "balance-sheet"!
Feb 4, 2014 8:05PM
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Credit scores are a consumer marketing scam designed to make you feel better while companies use those scres to rip you off.  Why would any company pay for a report they can't use to blame your higher interest rate?  I've had FICO scores above 800 for the past 20 years.  My Realtor remarked that she had never encountered a buyer with such a high score!  What does it get me?  Nothing special.  The insurance companies routinely tell me (as required by law) that I wasn't offered the lowest rates because of information provided in a consumer credit report:  number of accounts marked paid as agreed.  I looked.  They are all marked paid as agreed!  That's right.  I have a solid history of paying all my bills on time or earlier yet the insurance companies view me as a poorer risk based on the "consumer credit report."  They suggest that I can dispute their claim.  Ha!  What do I do?  Write the credit agencies and claim that I don't pay my bills on time?  Give me a break.  Credit scores are just a carrot on the end of a stick that is offered to the consumer to make him feel good while striving to reach an unobtainable goal while taking it up the rear end finacially!
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Most people ask about their credit report right when they are going to make a larger purchase such as a car or home. Thats not the right time since if there are errors or deficiencies, you wont have time to dispute or repair them.

Think of your credit report and credit score as your financial resume... You should look at it [once a year] and tweak it... Close old accounts, pay down high debt, dispute errors... That way when you need to apply for a loan, or a job in most cases these days, your credit report reflects the best YOU that it can.

Feb 3, 2014 2:34PM
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Why can't annalists like politicians just give a straight answer?  

ex. "In my opinion the best credit score would be one that is over ........."
Feb 6, 2014 3:07PM
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Hmmmm.....am over 800 and get what I want.

If not, will go elsewhere and get it.

Feb 5, 2014 6:42PM
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Bottom line is you can be 100 years old with a perfect payment record and if you open a new line of credit your score goes down. On the other hand if you are a billionaire you don't need to worry about your score.


The whole system is so convoluted that no one can explain how to improve your score.  I dropped from a 780 to a 740 because I bought 2 new cars (used) and refinanced my home all within a 5 months period. I had too many credit inquires on my credit report and my length of credit went from 14 years to 2 years (negative to your score). There are so many factors that go into your credit rating that just simply boggle the mind. If you have a credit card and the balance is $0 than use it on your next purchase for a candy bar and pay it when the bill comes in and continue to do so every month to show you pay your bills on time. Keep your credit to debt ration to under 20% and use your card for small purchases so you are able to pay the debt.


From past experience if you use credit and often for small amounts that you can pay in full at the end of the month your score will increase. The key is to show you can make payments on time! 

 


Feb 5, 2014 12:36AM
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Anyway the scoring can get the highest interest rate for the lender. PERIOD
Feb 5, 2014 2:16PM
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Why couldn't they have just made it 0 to 100 or 0 to 1,000 or even 100 to 1,000??
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