This CFP states that the optimal credit score for most Americans.

Achieving an 850 credit score is highly desired by many as it indicates a flawless borrower. However, only a small percentage of Americans can achieve this, and according to Faron Daugs, CFP, founder & CEO of Harrison Wallace Financial Group, it's not necessary.

Daugs informed Select that an 850 credit score is nearly impossible, but he encourages consumers to aim for a solid credit score that can provide the same financial opportunities.

To obtain the best financial products and interest rates, it is important to determine the optimal credit score. To improve your credit score, there are several steps you can take, including paying on time, keeping credit card balances low, and regularly checking your credit report for errors. To get started, you can obtain a free credit report from one of the three major credit bureaus.

Here’s the most ‘optimal’ credit score

A FICO credit score, ranging from 300-850, is used to evaluate all Americans and determine their eligibility for favorable financing options for a home, car, or credit card.

Daugs believes that a 760 credit score is the most optimal benchmark for Americans, rather than an 850 credit score.

According to Daugs, the ideal credit score to obtain the highest credit limits and lowest interest rates is 760. Once you attain a 760 FICO score, you will receive the same rates and limits as someone with an 800, 825, or even the highest 850 score.

According to Equifax, a credit score of 760 is considered "very good," as per their credit score ranges on their website.

• 580-669: Fair
• 740-799: Very good

A credit score of 760 is just as valuable as an 800 or any other higher score when it comes to applying for financing options, as it demonstrates responsible credit behavior, including paying bills on time, keeping credit utilization low, and having a healthy length of credit history.

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

How to achieve this credit score

Building a credit history without any blemishes requires persistent effort and solid personal finance skills, but it is achievable.

In 2020, the average credit score in America was 710, as reported by Experian. Regardless of where you are on the credit building or rebuilding journey, there are several actions you can take to improve your credit score.

• Paying off credit card debt can significantly improve your credit score. If you have a large amount of credit card debt, it will negatively impact your credit score. To avoid compound interest charges, consider using a balance transfer credit card. Alternatively, if you have multiple credit cards with balances, you may want to apply for a personal loan to consolidate your debt.
• Millions of Americans have credit report errors that may negatively impact their credit score. To avoid any negative consequences, it is recommended to review your credit report and consider using a credit monitoring service to keep track of any new credit inquiries or potential fraud.
• Your credit score is influenced by your credit utilization ratio, which is the amount of credit you use compared to your credit limit. To improve your credit score, keep your credit utilization low. Fortunately, you can request a higher credit line from your card issuer without creating a new inquiry on your credit report.

Consider a credit monitoring service for more insights into your credit score.

Bottom line

A strong credit score is crucial for many financial opportunities. Without a good credit score, you may miss out on affordable financing for big purchases, be denied employment, be denied housing options, and face difficulties in making important decisions.

If your credit score is not ideal, there are practical measures you can implement immediately to enhance it. After improving your credit score, you can then proceed to make bigger financial decisions to increase your wealth and plan for your retirement.

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