Average FICO credit score hits new high

I've had a perfect 850 credit score for more than a year.

How has my life changed?

Not one little bit.

I've been getting about the same number of credit card offers as when I had scores in the 700s. And I haven't received any preferential treatment, like when you board an airplane and your elite status gives you the right to slide past passengers with regular boarding passes.

The most I've gotten from having a perfect credit score is being able to kid my husband that my score is higher than his. His hovers around 830.

"After a certain point, it doesn't matter anyway," he quipped.

He's right. The widely used FICO credit score ranges from a low of 300 to a high of 850. A high score - along with other financial factors - can place you in a tier that results in the best lending deals. But high scores beyond a certain threshold are pretty much equal.

So it's noteworthy that the national average credit score has hit an all-time high of 706, according to FICO, the company that created the scoring model used by most lenders. Since reaching a bottom of 686 in October 2009 during the Great Recession, the national average FICO score has been steadily increasing.

Ethan Dornhelm, vice president of scores and predictive analytics at FICO, said the key drivers of the improvement in scores have been the U.S. economic recovery, consumer credit educational efforts, and an initiative by the credit bureaus that has led to certain accounts in collections being removed from people's credit files.

"It's been a pretty stable and growing economy over the last 10 years, driving things like lower unemployment, which in turn drives consumers being in stronger financial health," Dornhelm points out.

Increasingly, lenders have been providing free credit scores to consumers. I've found that when people know their score isn't good, they want to work on improving it. The two biggest factors that will boost your score are paying your bills on time and reducing the amount you owe.

People with FICO credit scores in the 800s often wonder why they haven't achieved perfection. But you don't need an exceptional score to be considered a premier borrower.

Here's why you shouldn't fret that you don't have a perfect credit score.

Let's say you want to purchase a car. Your lender reserves its most favorable auto interest rates for consumers with certain lending criteria that include a credit score of 720 or higher. Anything above this benchmark doesn't give you any extra leverage.

"The 'beautiful' FICO score is really in the eye of the lender," Dornhelm said. "Every lender has their own risk appetite. But I will say, once you're looking at FICO scores over 700, consumers should be qualifying for most any credit they're applying for, and at pretty favorable terms."

So, if your credit score number starts with a 7, you're in good company.

(c) 2019, Washington Post Writers Group