Can Your Credit Score Actually Be Too High? The Surprising Truth

Having an excellent credit score is something many of us strive for – but is there such a thing as a credit score that’s too high? As someone who’s spent years helping folks understand their credit I wanna share some insights that might surprise you.

The Surprising Downside of Sky-High Credit Scores

When I first started learning about credit scores I assumed higher was always better – no exceptions. But turns out, that’s not entirely true! While having excellent credit (800-850) definitely opens doors there’s actually a hidden catch that most people don’t realize.

Here’s the shocking truth: If you have an excellent credit score, a single mistake could hurt you MORE than someone with average credit.

Let me explain why this happens…

The Higher You Climb, The Harder You Fall

Think about it like this – when your credit score is already near-perfect, there’s only one direction it can go when something negative happens: down.

According to FICO data mentioned in the CNBC article look what happens when payments are missed

That’s pretty crazy, right? Maria with her excellent 793 score could lose up to 133 points from a 90-day missed payment, while Sophia with her fair 607 score would only lose up to 47 points for the same mistake.

As Bruce McClary from the National Foundation for Credit Counseling puts it: “As the saying goes, the bigger you are the harder you fall. Those with top credit scores can suffer major setbacks when missed payments are reported.”

The Car Analogy That Makes Perfect Sense

Wilson Muscadin, a financial coach, explains it perfectly using a car analogy:

“Imagine a brand new car in pristine condition. A visible scratch on the hood of that car is going to have a more dramatic effect on the value of that car than a scratch on a 3-year old used vehicle. That credit score impact could be as much as 100 points.”

That makes so much sense to me! When something’s perfect, even tiny flaws stand out more.

When Is a Payment Actually “Late”?

Before you panic about forgetting your due date by a day or two, here’s some good news: a payment isn’t technically “late” for credit reporting purposes until it’s at least 30 days past due.

If you miss your payment date but catch up within a few days:

• You’ll likely pay a late fee (up to $40 typically)
• You might face a penalty APR (higher interest rate)
• But it WON’T be reported to credit bureaus as late

However, once you cross that 30-day threshold, that’s when the damage starts. And the longer you wait, the worse it gets:

• 30 days late = significant score drop
• 60 days late = even bigger drop
• 90 days late = massive score drop (potentially 100+ points for excellent scores)

So What Credit Score Should You Actually Aim For?

Based on FICO score ranges from Experian:

• Very poor: 300 to 579
• Fair: 580 to 669
• Good: 670 to 739
• Very good: 740 to 799
• Excellent: 800 to 850

Here’s my take: while an 850 perfect score might be cool for bragging rights, anything above 760-780 is practically the same in terms of what it gets you. Most lenders don’t differentiate between a 780 and an 850 when it comes to giving you their best rates.

So instead of obsessing over hitting that perfect 850, focus on maintaining a score in the mid-700s or higher, which is excellent enough for nearly all financial needs.

How to Maintain Your High Credit Score (Without Stressing)

I’ve found these strategies super helpful for keeping my credit score healthy:

1. Never Miss Payments (This Is Huge!)

• Set up automatic payments (even if just for minimums)
• Use calendar reminders if you prefer manual payments
• Consider changing your due date to align with when you get paid

2. Keep Utilization Low

McClary recommends keeping balances below 30% of your credit limits. Personally, I aim for under 10% for optimal results.

3. Don’t Apply for Too Much Credit at Once

Multiple hard inquiries in a short period can temporarily ding your score.

4. Monitor Your Credit

I check my credit reports regularly to catch any errors or fraud before they cause damage.

What to Do If You Accidentally Miss a Payment

We’re all human, and mistakes happen! If you realize you’ve missed a payment:

1. Make the payment ASAP – The sooner you pay, the less damage to your score
2. Call your creditor – If it’s your first time missing a payment, many companies will waive the late fee if you ask nicely
3. Request goodwill deletion – If you’ve been a good customer, some creditors may agree not to report the late payment to bureaus
4. Set up safeguards – Use this as motivation to set up autopay or calendar alerts

The Benefits of Maintaining Excellent Credit

Despite the risks of falling from greater heights, having excellent credit is totally worth it! With a high score, you can qualify for:

• The best rewards credit cards (like the Blue Cash Preferred® Card from American Express, which gives 6% cash back at U.S. supermarkets and on select U.S. streaming services)
• Lowest mortgage rates
• Better auto loan terms
• Lower insurance premiums
• Higher credit limits
• More negotiating power

My Personal Experience

When I first started building credit, I was obsessed with getting to that perfect 850. I checked my score weekly and stressed over every little fluctuation. But over time, I’ve realized that maintaining a score in the high 700s is pretty much just as good – and way less stressful.

Last year, I accidentally missed a payment when I switched banks and forgot to update my autopay. My score dropped from 810 to 760 almost overnight! It was shocking, but I learned that even with that drop, I still qualified for all the same rates and cards. It took about 7 months of perfect payments to get back to where I was.

The Bottom Line: Good Credit Habits Matter Most

So, can your credit score be too high? Not exactly – but having a perfect or near-perfect score means you have more to lose if you make a mistake.

The key takeaway isn’t to aim for a lower score (that would be silly!), but rather to:

1. Understand that small mistakes can have bigger impacts on excellent scores
2. Be extra vigilant with payment timeliness if your score is excellent
3. Don’t stress about achieving a perfect 850 – focus on good habits instead
4. Remember that anything above ~760 gets you the best rates and offers

What’s your experience been with credit scores? Have you noticed how different factors affect your score? I’d love to hear your thoughts!

Quick FAQs About High Credit Scores

Q: Is a 850 credit score worth aiming for?
A: While cool to achieve, there’s no practical difference between 850 and scores in the high 700s for most lending purposes.

Q: How long does it take to rebuild after a late payment with excellent credit?
A: Usually 6-12 months of perfect payment history to recover most of the points lost.

Q: Can having too much available credit hurt my score?
A: Not directly – having high credit limits with low utilization actually helps your score. However, having too many recently opened accounts could temporarily lower it.

Q: Should I close unused credit cards to protect my high score?
A: Generally no! Keeping accounts open (especially older ones) helps your length of credit history and keeps your utilization ratio lower.

Remember, your credit score is just one piece of your financial health puzzle. While important, it’s the habits behind the score that really matter for long-term financial success!