I’m a banking expert, here’s the optimum credit score you need – anything above is just bragging

While having a perfect credit score of 850 can be impressive, you don’t necessarily need it to land the best deals, one expert claims.

Once you reach 740, you are considered to have an excellent credit score for credit cards, car loans and other non-mortgage products, according to Ted Rossman, senior industry analyst at Bank rate.

“For mortgages, I would say the limit is 780,” he told DailyMail.com. “After that point, I would definitely continue to practice the good habits that lead to a strong credit score, but I wouldn’t be obsessed with perfection.”

Your FICO score, which lenders and potential creditors such as landlords use to assess your ability to manage credit, can range between 300 and 850.

According to the credit score company, anything below 629 is considered “poor,” while anything above 720 is “excellent.”

Once you reach 740, you are considered to have an excellent credit score for credit cards, auto loans and other non-mortgage products, according to Ted Rossman, senior industry analyst at Bankrate

“While 760 used to be the score that qualified you for the top rates on mortgages, Fannie Mae recently changed the guidelines for federally backed mortgages to introduce 780 as the top tier,” Rossman said.

“It’s a bit of a loose guideline, and the number within that mid-700 can vary by lender. In general, I would look at a score of 740 to qualify for the best terms for most financial products, and 780 for mortgages.”

Scoring higher has no practical advantage, he said, you can only brag.

Once you hit the 740-plus upper limit, Rossman continued, you should be in “maintenance mode.”

“Pay your bills on time, keep your debt low, show that you can successfully manage different types of credit over the long term,” he said. “In other words, keep doing what you’re doing — but don’t obsess over every last point.”

However, he cautioned that it’s crucial to let your guard down. Credit can change quickly, Rossman continued, and even a 30-day payment delinquency can crush an otherwise excellent score.

“If you make a mistake, it might not cost you five points — maybe 100,” he said.

For example, if you have a credit score of 675 and qualify for a $300,000 fixed mortgage with a term of 30 years and an interest rate of 7.6 percent, you will pay $2,118 per month, according to the latest numbers from FICO.

However, if you have a score of 780 and qualify for a 30-year deal at 7 percent, you’ll pay $1,993.

“Over 30 years, that’s a $45,000 difference, which is a good way to illustrate the importance of a good credit score,” he said.

According to Experian, the average American has a credit score of 714, while this varies from state to state.

When it comes to improving your credit score, according to Rossman, you need to think about your credit utilization.

According to credit score company FICO, anything below 629 is considered ‘poor’, while anything above 720 is ‘excellent’

According to Experian, the average American has a credit score of 714, but this varies from state to state

Credit utilization is credit you use divided by credit available to you – and is especially important when it comes to credit cards and other revolving loans.

For example, if you have a $5,000 limit on a credit card and you charge $2,000 on it, your credit utilization rate is 40 percent.

“Credit usage is something you can change pretty quickly,” Rossman said. “It’s usually on your statement, which many people don’t realize.

“Even if you pay in full each month and avoid interest, you can have a high utilization rate if you use the card a lot. Say you go on vacation or make some home improvements and you spend $4,000, you used 80 percent of your credit that month. That looks risky.’

Financial experts typically recommend keeping your credit utilization rate below 30 percent, while FICO says most people with the best credit scores keep it below 10 percent, Rossman said.

My advice would be to make an extra payment or two in the middle of the month, or maybe ask for a higher credit limit. Those are both ways to get that ratio down.’