What is the highest credit score you should aspire to?

If you live in America and have any financial dealings whatsoever, the one thing likely to have the greatest impact on your fiscal life is your credit score.

A credit score is based on credit report information and the average US FICO score is around 300 to 850. The credit score is created by compiling a wide variety of financial data and ultimately the FICO score represents a consumer’s creditworthiness and the likelihood of paying back the money according to the terms of the agreement.

Banks, credit card companies and other lenders use the consumer’s credit score to evaluate their potential risk factors before lending money. More recently, many employers are beginning to conduct a credit check of all job applicants before deciding on whom to hire.

In addition, credit scores are being used by companies to determine prices for insurance and to rate potential customers.

As a result, many consumer’s are working to establish and maintaining a good credit history so they can achieve the highest credit score possible. The consumer has been led to believe that you need the highest credit score to get the best possible rates when buying a home, a car, or even when applying for a job or renting an apartment.

We do not subscribe to this belief system. While a bad credit score may be cause for concern, what would happen if you had no score at all? Since the only way to have a zero score would be to not use credit, would that be a good thing.

Could one reasonably argue, therefore, that the highest credit score we should aspire to, is ZERO?

Lenders use credit scores to evaluate the potential of risk and help them to decide who qualifies for a loan, at what interest rate and what credit limits to set.

So would a lender turn you down if your credit score was zero? It’s certainly possible, but that just means you need a more highly educated lender. A good lender should be able to assess your creditworthiness even without a FICO score.

In lieu of having the largest score possible, a knowledgeable lender would actually have to think for himself to access the credit risk based on your income history and your personal financial statement.

You may be surprised to learn that a great many millionaires have a zero FICO score, and that’s the one and only credit score they will ever aspire to because it signifies that they pay cash for everything!

A zero credit score is, in reality, the best highest credit score you can ever have.

So what’s it going to be? Are you still going to work like crazy to achieve the highest credit score possible on the FICO rating scale, or are you going to do what millionaires do and define “highest” and “best” for yourself?

» How To Read Credit Score
Learn how to read credit score information. Being knowledgeable about what is included in your credit report will help you better understand how your application is being viewed by a lender.

» Raise Credit Score - Or Pay Off Debt?
Why seeking to raise credit score results may actually work against you. Many consumers do not realize the harmful effects of spending too much time trying to build their credit and increase their FICO.

» Report Credit Fraud - Quick Action Lessens Loss
Report credit fraud immediately to all credit bureaus in order to minimize the negative impact of someone using your credit to initiate crimes.

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