A person's credit score is a measurement of his ability to pay off loans that he takes out. A person with a higher credit score is considered more creditworthy by credit rating bureaus than a person who the bureaus give a lower score. Having a higher score will qualify an individual for lower rates on interest on loans from most lenders. A perfect credit score is not necessary to receive the benefits of good credit.
Credit Scores
Credit scores are determined by credit reporting bureaus using a formula pioneered by the Fair Isaac Corporation. This formula uses information from the person's credit report to assign individuals a numerical score that expresses the likelihood that they will pay back a debt. Information taken into account includes payment history, length of credit history and amount of debt in relation to credit available. The scale ranges from 300 to 850.
Highest Credit Score Possible
A score of 850 is perfect credit -- the highest score possible. This indicates that, statistically, a person would be almost certain to pay back any loan issued them. This score could be attained through years of taking out and paying back loans on time, as well as keeping the balances on a credit card low. However, according to Bankrate.com, a score of 850 is exceedingly rare.
Highest Ranking
A score of between 775 and 800 will qualify a person for the very lowest interest rates on a loan that are offered to consumers. The person will be receiving, essentially, the exact same benefits as having a score of 850. A score lower than 775, however, might cause the person to pay a slightly higher rate of interest on his loans.
Considerations
It is unnecessarily and unrealistic to attempt to attain an 850 score, as a perfect score confers no additional benefits to the individual that a score of 775 or 800 -- the exact rating for a top-flight score is a matter of conjecture among credit experts -- will not already provide them. So, in this sense, a score of above approximately 800 could be considered, for all intents and purposes, perfect.
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