Perfect credit: Being too perfect can cost you

Perfect credit scores won't get you a better interest rate than very good credit scores. So why obsess about perfect credit?

Stelios Varias/Reuters/File
Credit cards are pictured in a wallet in Washington, D.C., in February. Perfect credit – a FICO score of 850 – won't save you money because banks give consumers with 750+ scores the same interest rate as those with 800+ scores or even perfect credit.

Perfect credit isn't all it's cracked up to be.

Very good credit scores will get consumers lending rates that are just as low without the worry – obsession, really – about perfect credit scores.

Because, yes, there are people who obsess about perfect credit, according to a new article from Money magazine. And that can turn out to be costly. [Editor's note: This paragraph was changed to reflect where the article was originally published.]

The article profiles Chris and Chrissy Peplinski, who have already achieved an enviable 813 FICO score. They're the crème de la crème of credit users.

They've made all the right financial moves: never missing a payment, paying off credit cards monthly, keeping debt loads low, and so on. Lenders fall over themselves to give money to such people.

But the couple wants to reach the elusive perfect credit score of 850. Money magazine interviewed several people embarked on the almost mythical quest.

These are folks who check their credit scores every few months, even though it costs them $50 or more a year. According to Money, the Peplinskis took out a car loan they didn't need and paid some $100 in interest to boost their credit score by 15 points.

Whoa! Are these perfectionists missing the point?

The reason to get a high credit score is so you can save money, not spend it. Truth is, as long as your score is somewhere north of 750, you'll get the same great low interest rates on mortgages and other loans as the 800+ crowd.

"There's obviously a benefit from [reaching] the 750 range," says Ken Lin, CEO of Credit Karma, a credit-score disclosure company based in San Francisco. But "once you hit that pricing tier, there really is no benefit" to a higher score.

There are so few people in the 800-850 range and the improvement in default risk is so small that banks don't find it profitable to offer them lower rates, he says. "It's not worth their hassle."

So why obsess about perfect credit?

"It's all about bragging rights," Mr. Lin says.

Fair enough. But perfect credit can be the enemy of the good.

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