When you apply for a loan, the lender checks your credit. Often, lenders sort applicants into categories based on their credit scores, including subprime, prime and superprime. If your credit score is in the prime tier, you likely have good credit.
What Credit Scores Qualify As Prime?
FICO scores and VantageScores range from 300 to 850. The Consumer Financial Protection Bureau classifies credit scores from 660 to 719 as prime. The prime designation largely overlaps with good credit.
A prime credit score is higher than a subprime score, which is 580 to 619, per the CFPB’s categories, or a near-prime score, which is 620 to 659. A score in the 720-to-850 range is called superprime. Banks and lenders can set their own definitions of prime credit or use different ranking systems entirely. As a result, credit standards may look different from one institution to another.
“We would not state that you have prime credit. That’s not the language that we actually use in the credit union industry,” says Ericka Wright, assistant vice president and branch manager at Addition Financial, a credit union in Florida. Instead, a credit union categorizes borrowers into numbered tiers based on their credit score, she says.
[Read: Best Credit Cards.]
What Are the Advantages of a Prime Credit Score?
Compared with lower credit scores, a score in the prime category offers several benefits. When you apply to borrow money, you have a better chance of being approved, and you may qualify for higher borrowing limits and lower interest rates. “You’ll get more options that are available to you as far as your buying power,” Wright says.
You may also be in a better position to negotiate longer repayment periods or reduced fees if you have prime credit, says Noam Wasserman, dean of the Sy Syms School of Business at Yeshiva University.
An entrepreneur with a prime credit score will probably be in a better position to borrow enough for small business start-up costs than someone with a lower score. “If you need to buy equipment to be able to start your company, if you need to be able to hire people and you need to be able to pay them and things like that, then you are going to need to get a bunch of resources,” Wasserman says.
Having prime credit can work in your favor even in situations that don’t involve borrowing money. Landlords can check your credit before deciding whether to rent an apartment to you, and they might prefer applicants with prime credit over those with lower scores.
And in some states, insurers may consider a policyholder’s credit when setting premiums. It could be easier to find car insurance or homeowners insurance at affordable rates if your credit score is prime or better.
[READ: Best Credit Cards for No Credit.]
Which Credit Cards Can You Get With a Prime Credit Score?
If your credit score is in the prime range, credit cards that require good credit might be within reach for you. These cards often have lower annual percentage rates, more benefits, and more robust rewards than cards for people with subprime credit. And many of them charge no annual fee.
You might qualify for a balance transfer card such as the Wells Fargo Reflect Card, the U.S. Bank Visa Platinum Card or the Citi Simplicity Card.
And you might be a good candidate for a cash back rewards card like Discover it Cash Back, the Blue Cash Everyday Card from American Express or the Capital One SavorOne Cash Rewards Credit Card.
You could also consider travel rewards cards that call for good credit such as the Chase Sapphire Preferred Card, the Delta SkyMiles Gold American Express Card or the IHG One Rewards Premier Credit Card.
[Read: Best Credit Cards for Good Credit.]
How to Find Out If You Have a Prime Credit Score
To determine whether you have prime credit, you need to check your credit score and see where it sits on the credit spectrum.
Some banks and credit card issuers let you view your score in your online account. You might also find your score on monthly statements for loans or credit cards. Alternatively, you could meet with a credit counselor or use a credit score app.
Your credit score can change significantly from one month to the next, so it’s important to review it regularly to know where you stand. Wasserman recommends paying attention to how your score changes over time. If your score is going up, you’re probably doing something right. If your score is falling, you’ll want to come up with a plan to bring it back up.
“The directionality of where it’s going is far more important, I think, than thinking about what bucket am I in,” he says.
How to Improve Your Credit Score
If you want to bring your score up to the prime category, there are steps you can take to boost it. Raising your credit score takes work, but it can be done if you consistently demonstrate to creditors that you’re responsible with money.
Wright suggests that people who don’t have any credit accounts start by opening one. Borrowers in this situation may need to consider secured credit cards, which require security deposits. “They can do any form of secured credit card products, any type of secured loans, because that’s also going to open up avenues for them to be able to have that positive payment history,” Wright says.
Payment history has a large impact on your credit score, so it’s important to get all payments in by the due date. You should also aim to keep your debts below 30% of your credit limit. And it’s best to apply only for credit that you need.
If it looks like you’re going to have trouble making a payment, be proactive and talk to the creditor right away. Don’t wait until you’ve already fallen behind.
Wasserman recommends that consumers ask lenders for personalized feedback after they apply for a loan and receive a decision. Some lenders may be willing to explain why they approved or rejected your application and will offer tips for improving your credit profile. “Worst-case scenario, you get a no,” he says. “Best-case scenario, you get all sorts of insights into how you are looked at by these important institutions.”
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