What is 'Prime Credit'

Prime credit is a characterization or designation of a credit score that falls into the range that is one step down from super prime. Consumers with prime credit are considered to have very good credit and pose little risk to lenders and creditors. Lenders and credit card companies offer some of their top loans and cards with the lowest interest rates and best terms to consumers with prime credit.

BREAKING DOWN 'Prime Credit'

Though each of the three main credit bureaus - Equifax, Experian and TransUnion - have the same overall range of credit scores (300 to 850), the credit score range that is considered prime may vary. Consumers with scores at the highest end of these ranges are considered to have super-prime credit, and consumers whose scores fall just below that range are considered to have prime credit. For example, Experian classifies super-prime credit as a score of 800 to 850, and prime credit as a score ranging from 740 to 799.

Borrowers with prime credit can expect to pay slightly higher interest rates than borrowers with super-prime credit since they are considered to have a slightly higher risk of not repaying their loans. For example, having a prime credit score might mean paying 1% more on an auto loan than a borrower with a super-prime credit score would pay. Having prime credit usually means you can get a new loan and retain access to your existing credit lines even when the overall credit market is tight. Even in a strong economy where credit is readily available, prime and super-prime borrowers receive most of the credit that banks issue.

If you apply for a loan with several different companies, you might be surprised to find that some classify you as having prime credit while others classify you as having super-prime credit. Or, if your score is toward the lower end of the prime range, you might find that some lenders classify you as having prime credit while others classify you as having near-prime credit. Because your credit file with each bureau may contain slightly different information, the score range you fall into with each bureau could be different, and lenders might offer you different rates depending on which bureau they pull your credit score from.

RELATED TERMS
  1. Credit Score

    A credit score is a number ranging from 300-850 that depicts ...
  2. Bad Credit

    A qualification of an individual's credit history that indicates ...
  3. Credit Rating

    A credit rating is an assessment of the creditworthiness of a ...
  4. Credit Reporting Agency

    A credit reporting agency is a business that maintains historical ...
  5. FICO Score

    A FICO score is a type of credit score that makes up a substantial ...
  6. Cut-Off Score

    A cut-off score is a minimum credit score an individual may have ...
Related Articles
  1. Personal Finance

    Time to Accept Credit Card Offers Again?

    How much you could get and whether to respond
  2. Personal Finance

    Is My Credit Score Good Enough for a Mortgage?

    Your score is critical in determining not only whether you'll secure a loan for a home, but also what interest rate you will be offered.
  3. Personal Finance

    How Bad Is My Credit Score?

    Find out how to assess your credit score to determine bad credit score ranges or if you are sitting at a comfortable level, and what you can do about it.
  4. Personal Finance

    Best Ways to Get Free Credit Scores in 2016

    You've probably seen spammy ads offering the opportunity to check your credit score for "free." Well, not all credit score services are created equal!
  5. Personal Finance

    Should Your Credit Rating Scare You?

    Take the mystery out of credit scores by learning the most important ways it can impact your life.
  6. Personal Finance

    Credit Scores And Your Mortgage Payment: It Matters

    Your credit score can have a huge impact on your mortgage payments. Here are some reasons why.
  7. Personal Finance

    Debunking Credit Myths and Improving Your Score

    The best way to improve your credit score is to ignore the many credit myths that exist and use these tips.
  8. Personal Finance

    How To Overcome Bad Credit

    Some lenders can look overlook your credit score and assess other factors that fairly determine if you are a reasonable credit risk.
  9. Personal Finance

    Credit Repair: How to Improve Your Credit Score

    There is no quick fix for a bad credit score, but there are several strategies you can take to improve your credit rating and save money over the long term.
  10. Personal Finance

    What the Nation's Rising Credit Scores Mean

    Credit scores indicate that consumers may be back on their feet after the Great Recession.
RELATED FAQS
  1. Can a Best Buy credit card help you build credit?

    Learn about how using a Best Buy credit card responsibly can lead to a higher credit score and lower interest rates on mortgages ... Read Answer >>
Trading Center