This credit score is optimal for most Americans, says this CFP

An 850 credit score is a coveted achievement for many as it signifies a 'perfect' borrower. But very few Americans are able to attain a perfect credit score, and according to Faron Daugs, CFP, founder & CEO of Harrison Wallace Financial Group, it's really not necessary.

In fact, Daugs told Select that an 850 score is "nearly impossible", but reassures consumers there's a solid credit score everyone can achieve to earn the same financial opportunities.

Select details what the most optimal credit score is to get the best financial products and interest rates available, how to get your credit score up to snuff and how you can get started today.

All Americans are evaluated based on their FICO credit score, which ranges from 300-850. The higher your score is, the more likely you can get favorable financing options for a home, car or credit card.

But Daugs firmly believes that a 850 credit score is an unnecessary benchmark for Americans to reach for. Instead, he says that 760 is the most optimal credit score.

Daugs told Select: "The optimal score that will allow you to receive the highest credit limits and lowest interest rates, is actually 760. Once you achieve a 760 (according to FICO) score you will receive the same rates and limits as someone with an 800, 825 or even the ultimate 850."

This is a bit contrary to common belief as a 760 credit score is considered "very good", according to Equifax according to its credit score ranges on their website. The ranges are:

• 300-579: Poor
• 580-669: Fair
• 670-739: Good
• 740-799: Very good
• 800-850: Excellent

By having at least a 'very good' credit score, you're demonstrating to financial institutions that you pay your bills on time, keep your credit utilization rate low and have a healthy length of credit history. And by doing that, a 760 credit score is just as valuable as an 800 or any other higher score when it comes to applying for financing options.

In short, everything above 760 is just icing on top.

Earning a 760 credit score doesn't happen overnight. It takes persistent effort and solid personal finance skills to build your credit history without any blemishes, but it can be done.

In fact, the average credit score in America in 2020 was 710, according to Experian. So wherever you are on the credit building (or rebuilding) journey, there are several things you can do to get your credit score moving in the right direction:

• Pay down or refinance credit card debt: One of the largest parts of your credit score is comprised of all debts owed (30%). So if you owe a significant amount of credit card debt, it will weigh your credit score down significantly. You may want to consider a balance transfer credit card to avoid compound interest charges. Or if have multiple credit cards with balances, consider applying for a personal loan to consolidate your debt.
• Dispute credit report errors: Millions of Americans have errors on their credit report that may be negatively affecting their overall score. Be sure to take a look at your credit report, and consider using a credit monitoring service to keep track of any new credit inquiries or potential fraud.
• Ask for higher credit limits: Each one of your credit cards has a credit limit that you can spend up to, and how much credit you use in comparison to this limit affects your overall credit score. This is called your credit utilization ratio, and if you keep the amount of credit you use low in relation to your credit limit, the higher your credit score can go. The best part is that you can ask for a higher credit line from your card issuer and this won't create a new inquiry on your credit report.

For more tips, read our guide on how to build and achieve a good credit score. And consider a credit monitoring service for more insights into your score:

Your credit score is the bedrock of many financial opportunities. Without a solid credit score, you may be locked out of opportunities to grab affordable financing for a large purchase, possibly be rejected for a new job, be unable to be approved for housing options and other cornerstone decisions.

However, if your credit score is less than perfect, there are tangible steps you can take today to improve it. And once your credit score is up to snuff, you can start making larger financial decisions to grow your net worth and set yourself up for retirement.

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