Breakdown of a Prime BorrowerSeptember 28, 2020
Becoming a prime borrower is a good financial goal to have. And if you’re already there, maintaining your score will pay off.
Those with prime credit have an easier time getting approved for new credit cards and loans because their credit score is on the higher end. A high credit score indicates that you have the ability to pay your bills on time and carry low balances.
Card issuers and lenders have more confidence in lending money to a prime borrower rather than someone who is subprime because prime applicants are statistically less likely to default, or fail to make their payments. And even if both a prime and a subprime borrower qualify for the same credit card or loan, the prime cardholder will most likely receive better terms, a higher credit limit and a lower interest rate.
In fact, having super-prime credit can save you more than 3 times on interest payments.
So you can compare your own financials to that of the average prime borrower and see how you stack up, CNBC Select took a look at average credit score, income and debt. Using data from Experian, one of the three main credit bureaus, here is a snapshot of prime data across U.S. consumers.
Snapshot of a prime borrower: Their credit score
Experian’s most recent data from Q1 2020 shows that prime borrowers have an average 767 FICO credit score.
On the FICO credit score scale ranging between 300 on the low end to 850 on the high end, a 767 falls under “very good.”
- Poor: 300 to 579
- Fair: 580 to 669
- Good: 670 to 739
- Very good: 740 to 799
- Exceptional: 800 to 850
If you have prime credit, it’s likely you fall within this range. According to Experian’s annual consumer credit review published in January of this year, a quarter (25%) of Americans held a “very good” credit score in 2019.
Learn more: 50% of Gen Z has a credit card and a prime credit score—and they’re more credit active than millennials were
Having good or excellent credit will help you qualify for the best credit cards, many of which are now offering limited-time welcome bonuses. These are great opportunities that can save you money now and in the future, especially on travel.
For instance, Chase just released a massive 80,000-point bonus for the Chase Sapphire Preferred® Card — the bank’s highest ever bonus offer for this card. New Sapphire Preferred cardholders can earn 80,000 bonus points after spending $4,000 on purchases in the first three months from account opening. That’s 20,000 more points than the previous offer and is worth up to $1,000 when you redeem points for travel through Chase Ultimate Rewards®.
The popular travel card also rewards you for your purchases. Find out if you are eligible for Chase Sapphire Preferred’s new 80,000-point, limited-time welcome bonus here.
Chase Sapphire Preferred®
On Chase’s secure site
5X points on Lyft rides through March 2022, 2X points on travel and dining worldwide, 1X points on all other purchases
80,000 bonus points after you spend $4,000 on…