Published in: Credit Cards | Nov. 16, 2018
My Credit Score Is 800. Now What?
By: The Ascent Staff
Having a credit score of 800 or higher puts you in an elite tier of borrowers, given that only about 20% of people have a credit score in this range. People who have scores above 800 enjoy extraordinary credit card perks, low loan rates, higher borrowing limits, and other financial benefits that aren't offered to people who have lower credit scores.
What you get from an 800 score
Having a credit score over 800 is a great achievement, but don't expect a blue ribbon and an award ceremony. A credit score is only beneficial to the extent that you use it.
Here's how a score above 800 can help you when it comes to three major banking products:
- Car loans: You'll qualify for rates from banks or credit unions as low as 2% to 4% when buying a new or used car. If you buy new, it's likely you'll qualify for 0% financing provided by the car manufacturer's financing arm.
- Credit cards: An 800 score more than qualifies you for the best travel cards, which have valuable perks including higher credit limits and up-front sign-up bonuses worth $600 or more.
- Mortgages: Based on current quotes, borrowers who have a credit score above 760 qualify for a 30-year mortgage with rates as low as 3.6%. That compares to a 5% rate offered to borrowers who have a score below 640. Rates can vary by location -- see the Fool.com mortgage rate comparison tool for rates in your area.
Have debt? Cash in.
If you have a high credit score, there are a few ways to use it to your advantage. The first thing you should do, if you have any outstanding debt at all, is to consider refinancing your loans.
If three years ago you got a 5% mortgage rate because you had a 680 score, it's probably a good time to explore whether refinancing your mortgage could save you money. Banks won't go out of their way to let you know that you can qualify for a lower mortgage rate thanks to your improved credit score. You'll need to do some rate shopping on your own.
Even smaller loans can be refinanced, saving you thousands of dollars in interest over the life of the loan. Banks and credit unions are happy to refinance car loans and student loans at lower rates to win your business, which can reduce your monthly payment and save you money on interest over time.
SoFi, which specializes in student loan refinancing, notes that nurses who used its program to refinance their student loans are set to save more than $25,000, on average. The data is skewed high -- people with high loan balances are most likely to refinance their loans -- but the point is that some borrowers stand to save thousands of dollars by using their high credit scores to qualify for a student loan refinancing. There are some particularly important things to consider before refinancing student loans, depending on whether the loan is private or public.
Get a free vacation or some extra spending cash
The financial benefits of having a good credit score aren't just limited to people who have existing debt or people who need to borrow money.
Credit cards are one of the few financial products that offer prime borrowers not just lower interest rates, but cash rewards. As the industry becomes more competitive, credit card companies are rolling out cards for people with excellent credit that carry new cardholder bonuses worth hundreds of dollars.
Travel cards are especially lucrative. The three travel cards that score best in our rankings at The Ascent offer combined new-cardholder bonuses that add up to at least $1,325 when redeemed for travel. That goes a long way toward covering the average American family's vacation budget. A Money Magazine survey found the average family spent about $1,600 on summer vacations.
Notably, travel rewards don't always have to be redeemed for large travel purchases. Some cards allow for cash redemptions (albeit at a lower rate), and "travel" can include redemptions for Uber gift cards or car rentals, for example.
Of course, cash-back cards have their perks, too. The cash-back cards we rank the highest at Fool.com have combined new cardholder bonuses of $500 for new cardholders in addition to high rewards rates on an ongoing basis. It's all about relative value, though. One travel card sign-up bonus program offers points that convert to $500 in cash after meeting the minimum spending requirement. Depending on the program, a travel credit card can offer more immediate cash value than a cash-back credit card.
Keep your excellent score
Credit scores show your creditworthiness at a single point in time, and thus your score will rise and fall as banks send updated information about your financial accounts to the three major credit bureaus each month.
To keep your excellent score, you really only need to do two things:
- Keep paying your bills on time. This is the single most important factor that affects your credit score.
- Don't carry high balances on credit cards. Aim to use less than 30% of your credit limits in any given month, which is the accepted "cutoff" point at which high balances can start hurting your score. Asking your bank for a credit limit increase or opening another credit card account to boost your combined limits can help here.
If you do these two things, the rest is really just a rounding error. An 800 credit score shouldn't be taken for granted. One mistake -- like a 30-day-late payment -- could send your score down 100 points or more. It should go without saying that once you've made it over 800, keeping your score in this elite range should be the No. 1 goal. Keeping a score above 800 is much easier than it is to bring a bad score back up to 800.
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