Credit score: how high can it go?

harriethomeownerApril 24, 2007

What's the upper limit on a credit score? Is it 850? What would cause one not to have a "perfect" score?

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dave_donhoff

Hi Harriet,
Yes, 850 is the penultimate score, generally.

There's a LONG list of items that affect credit scores... here are some good articles that simplify it a bit;

Credit Scoring - NOLO

WhatÂs In Your Score - myFICO

Credit score myths - CNNMoney

Cheers,
Dave Donhoff
Strategic Equity & Mortgage Planner

    Bookmark   April 24, 2007 at 1:19PM
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talley_sue_nyc

"penultimate" means "second to the final" or "the one right before ultimate"

So is 850 the ULTIMATE, or the PENultimate?

("penultimate" is one of my favorite words)

    Bookmark   April 30, 2007 at 1:19PM
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dave_donhoff

DOH! Drats...
Foiled by a pedant again!
;~D

(Skulking back to my dictionary..)

    Bookmark   April 30, 2007 at 5:08PM
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harriethomeowner

I just saw somewhere that 900 is considered a "perfect" (or perhaps "ultimate"?) credit score, so maybe 850 would be the "penultimate."

What prompted my original question is that I don't understand why DH and I wouldn't have the highest possible scores. We don't carry any revolving, unsecured debt; we pay everything on time and in full; and we have various types of credit lines open and available (that is, we do use credit, but we use it responsibly). Our scores are in the low 800s.

    Bookmark   May 2, 2007 at 2:12PM
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saphire

That is a great score. I recently watched a loan officer salivate at a 791

    Bookmark   May 4, 2007 at 1:38AM
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cmarlin20

I've read that no one ever gets the highest, not that it really matters.
Good enough is good enough, lenders know not to look for the highest.

    Bookmark   May 4, 2007 at 12:08PM
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triciae

The exact calculations are proprietary information. But a few of the things taken into consideration & not mentioned so far are:

1.) Amount of unused credit;
2.) How long the unused credit has been available;
3.) On revolving debt...they like to see the lines completely paid off for a certain length of time. So, if there's one card that you use monthly...even if you pay it off every month there's still a very slight ding on your credit. It will raise your score to leave all cards completely open for 3-6 months every so often.
4.) They also look at the length of time you've been paying on larger outstanding debts like mortgages. So, if you've been paying on time for 15 years...you'll score higher than somebody paying 8 years (everything else being equal).
5.) They also look at percentage ratios of unused credit to used credit.

In addition to the 3 credit scoring agencies many lenders also use their own proprietary credit scoring methodologies. These utilize the 3 primary scores averaged plus other criteria that the lender may feel compelled to include such as how long you've held the same job, how long you've lived at the same address, and whether you own or rent.

Tricia

    Bookmark   May 4, 2007 at 1:55PM
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coolvt

On the perfect score....it should be noted that most institutions that I'm familiar with pull reports and from all 3 major credit companies, but pull only a score from one of three.
The range of each is (was accurate a few months ago):
Experian 375-900
Equifax 350-950
Empirica 300-850
If you aren't satisfied with your scores, and I'm not with mine, you have to remember that the credit companies are not looking at your total financial situation. They don't ask for your income or expenses. They are simply looking at the likihood of you repaying what you borrow based on your past experience.
A person could have lost his job 2 weeks ago and have no income, be going for a $10,000 car loan and get a score of 780. Another person could be going for the same loan, have $200,000 per year income, have 10 million dollars in net assets, perfect payment history and get a lower score. The lower score could be caused too many new accounts, too many inquiries, credit cards that too new, etc.. they all help to reduce the score. I think a poster has quoted a site that explains what influences the scoring.
So, I have limited confidence in the scoring. "If mine isn't the highest possible, then the scoring isn't all that good" :-))

    Bookmark   May 4, 2007 at 5:27PM
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triciae

cooltv,

That's why, as I posted, that many lenders have their own proprietary credit scoring methodologies. Yes, they use the 3 agencies' numbers as part of their criteria but add such factors as you have noted. The lending institution's credit scoring scale is proprietary & does NOT correspond to the numbers you've given for the 3 major reporting services. Each lender's is unique. So, your "score" from a lender may...or may not...reflect an average of the three majors. A good reason to ask any lender you're considering using if they have their own proprietary scoring system.

Tricia

    Bookmark   May 4, 2007 at 5:41PM
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partst

After reading all this my question is why is my score higher than my DH? I have not had job or any income, just in my name, for over 20 years. I have never used his last name. I had very good credit when we married, 25 years ago, but his was ruined by his ex. It took several years to pay off her debt and fix his credit. I did not commingle anything with him until that part of his financial life was over.

We only have one credit card, both our names, that we pay in full every month. No mortgage or any other credit cards. The only reason I even know this is we bought a car a 2 years ago and took advantage of 0% interest instead of taking the money from sayings to pay for it.

DH works for the dealership and was told by the finance office that I had the highest score they had ever seen and his was 4 points lower. So anyone have a reason as to why mine would be higher?? Just curious!

    Bookmark   May 4, 2007 at 7:30PM
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triciae

Who did the financing? Did the lender use proprietary credit scoring methodology? If so, part of the lender's criteria may have affected your husband's credit score a bit. Who's the primary on the joint credit card? Call your call lender & ask.

Tricia

    Bookmark   May 4, 2007 at 8:50PM
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saphire

Mine was 3 points higher than DHs the last time we checked. I have not worked this century. Some of our credit cards have his name first, others mine. Neither has ever had credit problems. Our mortgage which is old has his name first. I have no explanation nor does it really matter

He recently checked it and it was 10 points higher right after opening a credit line, again I have no idea why. I did not check mine since I was not on the account

    Bookmark   May 4, 2007 at 11:08PM
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