Can Your Credit Score Be Too High?

Having an exceptional credit score is usually seen as something to strive for But is there actually such a thing as having too high of a credit score? The short answer is yes – it is possible for your credit score to be considered too high by some lenders. While a higher score is generally better, there are some potential downsides to having an exceptionally high credit score over 800.

What is Considered a High Credit Score?

Credit scores range from 300 to 850. In general:

• A credit score above 760 is considered excellent
• Scores between 700 and 759 are good
• Scores between 670 and 699 are fair
• Anything under 670 is considered poor

So a “high” credit score is usually 760 or above, with 800+ being exceptional. Only about 20% of consumers have credit scores in this top tier range.

The Benefits of a High Credit Score

There are certainly many advantages to having a pristine credit score:

• You’ll qualify for the best interest rates on loans and credit cards
• Creditors will view you as lower risk, making approval easier
• You’ll have access to top rewards credit cards and programs
• It demonstrates responsible money management
• May help you qualify for better rental housing
• Could lower insurance premiums in some cases

So clearly there are many financial perks and advantages to reaching that peak credit score range.

When Can a High Credit Score Work Against You?

While less common, there are a few scenarios where an exceptionally high credit score could have some unintended consequences or work against you:

1. More Significant Impact from Missed Payments

If you have a long history of perfect payments a single late payment can have an outsized impact on your credit score. For someone with a lower score, a missed payment may not lower their score much further. But if you have pristine credit, it could cause a more dramatic drop.

For example, a 30-day late payment could drop an 800 score by 100 points or more, whereas someone with a 700 score may only drop 50 points for the same missed payment. Many lenders now report late payments to the credit bureaus after just 30 days past due.

2. Difficulty Qualifying for Specialty Loan Programs

Some mortgage and government-backed loan programs actually have maximum credit score thresholds. This seems counterintuitive, but it happens

For example, VA loans and USDA home loans are intended for lower-income borrowers. There may be a cutoff at 640 or 680, where those with higher scores no longer qualify. So a too-high score could exclude you from some affordable loan programs.

3. Higher Interest Rates from Creditors

Believe it or not, some lenders actually charge higher interest rates to those with exceptional scores. They assume that someone with an 850 score has access to the lowest rates, so they bump up pricing to maximize their profit.

In particular, this seems to happen frequently with credit card offers. Issuers lure in high scorers with big signup bonuses, but then offset it with higher long-term interest rates.

4. Increased Scrutiny from Lenders

When lenders see a credit score that seems “too good to be true”, it can raise suspicions and prompt additional screening. They may suspect identity theft or that your report is inaccurate.

While it seems contradictory, hitting credit perfection can cause lenders to take a harder look and add extra verifications. They want to ensure your score legitimately reflects your risk level.

5. Higher Risk of Credit Card Fraud

Exceptional credit scores – especially over 800 – tend to attract criminals seeking to open fraudulent accounts. In the eyes of fraudsters, high scores equal high credit limits.

So you may face more risk of having your identity stolen or existing accounts compromised. Being vigilant about monitoring your credit reports is critical.

6. Potential Denials from Lenders

Some lenders automatically reject applicants whose credit scores exceed a defined upper threshold, like 820. It sounds strange, but may happen. They figure such high scores must be a mistake.

And if they do approve, they will likely recheck your score later and monitor for significant drops. Even a small score decrease of 20 points can lead to accounts being closed.

Tips for Managing a Too-High Credit Score

If you find yourself in the rare scenario of having too pristine of a credit score, here are some tips:

• Don’t open new credit accounts just to lower your score. This approach can backfire.

• Consider adding yourself as an authorized user on someone else’s credit card instead. It adds a card to your history without a hard inquiry.

• If you miss a single payment, get back on track right away. Don’t let it snowball.

• Opt to exclude your credit score when filling out credit card or loan applications.

• Ask lenders to reconsider you if declined for having too high of a score. Supply additional verification info if needed.

• Monitor your credit reports frequently for any suspicious activity or errors that could quickly tank your score.

• Let one of your credit cards report a small, non-zero balance each month. Keeping all cards at 0% utilization can seem dubious.

The Bottom Line

While rare, there are scenarios where an exceptionally high credit score over 800 could work against you. The key is monitoring your credit, being aware of how different creditors perceive ultra-high scores, and taking steps to manage it while keeping your perfect payment history intact.

Having great credit is important, but once you’re in that top tier, make sure to manage expectations, as some creditors will view that high score differently than you’d assume.

A credit score of 750 is considered “very good” and is above the average credit score in the United States. While it’s not as rare as an exceptional score of 800 or higher, it still places you in a relatively strong position with lenders.