What is a Prime Credit Score and Why Does it Matter?

Your credit score is one of the most important numbers in your financial life. It’s right up there with your income, expenses, and net worth That three-digit number can open doors to attractive credit cards, loans, and other financial products – or firmly close them, if the score isn’t in an ideal range

So what exactly is considered an “ideal” credit score? Enter the concept of a prime credit score.

This complete guide will tell you everything you need to know about prime credit scores, such as

• What is a prime credit score?
• The benefits of having a prime credit score
• How to reach a prime score
• Maintaining and monitoring your score
• Credit score factors and ranges
• Frequently asked questions

Let’s dive in!

What is a Prime Credit Score?

The commonly used 300-850 FICO scoring model says that a “prime” credit score is between 660 and 719.

Most lenders think that people with FICO scores in this range are not a big risk. People with credit scores of 660 or higher are more likely to be approved for credit and get the best terms, such as lower interest rates.

The tiers of credit scores are commonly defined as:

• Deep subprime: Below 580
• Subprime: 580-619
• Near prime: 620-659
• Prime: 660-719 (the “sweet spot”)
• Super prime: 720+

Prime is just one step below super prime, which is the highest credit tier. Individuals with super prime scores of 720+ are viewed as almost no risk by lenders and qualify for the very best rates and terms.

But even being in the prime credit score range is excellent. Prime borrowers have access to the most competitive credit products, including rewards credit cards with lucrative bonus categories and intro 0% APR offers.

The Benefits of a Prime Credit Score

Why is it valuable to reach a prime score? Here are some of the key benefits:

• Higher approval odds – Lenders view prime borrowers as low risk, so you’re more likely to be approved for new credit or loans.

• Better loan terms – Interest rates are based on risk, so prime borrowers qualify for the best rates, often saving hundreds or thousands over the loan term.

• Access to rewards cards – Most premium travel and cash back credit cards require good to excellent credit for approval. A prime score opens up these options.

• Increased borrowing power – Higher credit limits allow you to borrow more, for large purchases or projects.

• Lower security deposits – A prime score means you won’t have to put down a deposit when opening utilities in your name.

• More rental options – Landlords often check credit scores and prefer tenants with good credit history.

Maintaining a prime credit score gives you financial flexibility. You’ll have more options, better terms, and may even pay less for insurance due to the lower risk profile.

How to Reach a Prime Credit Score

What can you do to get your credit score into the “prime” range if it’s not already there?

• Pay all bills on time – Payment history is the biggest factor in your scores. Even one 30 or 60 day late payment can wreck a good score. Set up autopay or reminders to avoid slips.

• Lower credit utilization – Keep balances low, ideally under 30% of the credit limit on each card. High utilization drags down scores.

• Limit new accounts – New credit dings your score short-term. Apply selectively, not just for perks. Too many new accounts is seen as risky.

• Correct errors – Verify all information on your credit reports and dispute any errors with the bureaus. Mistakes can negatively impact your scores.

• Monitor regularly – Keep tabs on your credit with a free monitoring tool. This helps you catch issues early.

• Don’t close old accounts – Having long, positive credit history helps your score. Keep old accounts open unless there’s a compelling reason to close.

With diligent credit management over time, you can reach and remain in the “prime” zone. Be patient as it takes effort to build credit.

Maintaining and Monitoring Your Credit Score

Reaching a prime score is just the first step. Effective credit management requires ongoing effort and awareness. Here are some tips:

• Review credit reports from Equifax, Experian and TransUnion annually. Look for errors or unfamiliar accounts that could indicate identity theft. You can obtain free credit reports at annualcreditreport.com.

• Sign up for free credit monitoring such as CreditWise from Capital One. This tracks your score and alerts you to big changes. Monitoring won’t hurt your score.

• Before applying for new credit, check your score to make sure it’s optimal. New inquiries can cause a temporary dip.

• Set up autopay or payment reminders to avoid late payments leading to score drops. Even one 30 day late can devastate an excellent score.

• If possible, pay balances in full each month. Carrying balances leads to higher utilization which can lower your score, especially if over 30% of the limit.

• Check your scores across different models such as FICO and VantageScore. Different scoring formulas can produce varying results.

Staying on top of your credit should become a regular habit. Monitoring services and alerts make this easy and help spot issues before they snowball.

Credit Score Ranges and Factors

While a FICO score of 660-719 is considered prime, you may be wondering – how is my score calculated in the first place?

Here is a quick overview of credit score ranges and the factors that make up your scores:

• Score ranges
  • 800-850 = Exceptional
  • 740-799 = Very Good
  • 670-739 = Good
  • 580-669 = Fair
  • Below 579 = Very Poor
• Major factors
  • Payment history – 35%
  • Credit utilization – 30%
  • Credit history length – 15%
  • New credit – 10%
  • Credit mix – 10%
• Other factors
  • Hard credit inquiries, collections, bankruptcies

As you can see, responsible long-term credit management involving good payment history and low utilization are most important. Keep those pillars in mind as you work toward and maintain a prime score.

Frequently Asked Questions about Prime Credit Scores

Here are answers to some common questions about building and maintaining a prime credit score:

How long does it take to reach a prime score?

It depends on your starting score, but often takes at least 1-2 years of diligent credit management. Pay on time, lower balances, and be patient.

Will one late payment ruin a prime score?

A single 30-day late won’t devastate your score but may drop it out of prime temporarily. Make sure it’s a rare blip, not a pattern.

Should I apply for multiple credit cards to build my score?

No – too many new accounts at once looks risky. Space out new applications over time. New cards also lower your average account age.

Is it bad to cancel credit cards?

Generally, yes. Closing your oldest cards shortens your credit history, damaging your scores. Leave old accounts open unless a compelling reason.

How often does a prime score need to be monitored?

Check your score every few months and review full credit reports annually. Sign up for monitoring if possible for regular visibility.

Does checking my own score lower it?

Nope! Checking your own scores does not hurt them. Only hard inquiries made when applying for credit get recorded and impact your score temporarily.

Final Takeaways on Prime Credit Scores

A prime credit score ranging between 660-719 unlocks great financial opportunities, including access to competitive credit products and the best terms. Excellent credit means lenders view you as a low risk.

Reaching and maintaining a score in the prime or super prime tiers takes diligent effort over time – there’s no quick fix. Pay bills on time, lower balances, limit hard inquiries, monitor regularly, and allow positive history to build.

Know your credit score and understand the steps to take to reach your goals. Your financial options expand tremendously once you enter the credit score “prime” time!