Super-Prime Credit

What Is Super-Prime Credit?

Super-prime credit is a credit score that is at the highest end of a credit bureau’s score range. Consumers with super-prime credit are considered to have excellent credit and pose the least risk to lenders and creditors. Credit card companies and lenders offer their best credit cards and loans with the lowest interest rates and most favorable terms to consumers with super-prime credit since they are considered to be the lowest risk consumers.

Understanding Super-Prime Credit

Each of the three major credit bureaus — Equifax, Experian, and TransUnion — has its own credit score range. For Equifax, it’s 280 to 850. Experian's range is 330 to 830. TransUnion is 150 to 950. Having super-prime credit means having a score near the top of these ranges.

Experian, for example, considers a credit score of 740 or above to be super-prime. Consumers with slightly lower scores, in the 680 to 739 score range, are considered prime borrowers and are also offered very good terms, though their interest rates may be slightly higher than what super-prime borrowers pay.

Super-Prime Credit Interest Rates

In most cases, consumers with super-prime credit will have access to better loan terms and lower interest rates. For example, if a super-prime borrower can get an auto loan at an annual percentage rate (APR) of 2.7%, a prime borrower might get the same loan at 3.1% APR. Most of the new credit and loans that banks issue go to super-prime and prime borrowers because these consumers are the most likely to repay what they owe. In markets where credit is tight, super-prime borrowers are more likely to retain access to credit than subprime, near-prime, and sometimes even prime borrowers.

A consumer’s credit score and classification as super-prime, prime, near-prime, or subprime can vary by the credit bureau for two reasons. One, the consumer’s credit file with each bureau may have somewhat different information because some lenders only report to one or two of the three bureaus. Two, each bureau uses a different method for calculating credit scores. As a result, a consumer that one bureau classifies as super-prime might be classified as prime by another bureau.

Characteristics of People With Super-Prime Credit

In Aug. 2019, the Consumer Financial Protection Bureau (CFPB) released its biennial report, "The Consumer Credit Card Market." The 193-page report lists a variety of facts regarding Americans who have super-prime credit scores, which it defines as a credit score of 720 or higher. The report includes information that might be useful to anyone looking to join the elite ranks of those consumers with the highest scores.

Average Debt

The CFPB report showed super-prime cardholders had an average 2018 year-end balance on their general-purpose cards of about $5,000. This is significantly less than consumers with prime credit, who had an average balance of around $9,000. For private label or store-branded credit cards, super-prime cardholders averaged slightly over $1,000 in debt while near-prime cardholders averaged about $2,000 in debt.

Consumer Cardholding

Approximately 95% of super-prime cardholders have at least one credit card and on average they have four open credit card accounts. Not surprisingly, credit card companies showed a preference for issuing credit to super-prime consumers, issuing them almost half of all new credit cards.

Despite having access to increasing credit, consumers with excellent credit do not max out their credit cards. The CFPB report showed that most of the growth in available credit is accounted for by unused lines on accounts held by consumers with super-prime scores.

Revolving Rates

The CFPB report categorizes credit card accounts as either "transacting" or "revolving." Cardholders who pay off their accounts in full before the next credit cycle begins (and thereby avoid racking up interest charges) fall into the transacting category. Cardholders who do not pay their accounts in full and allow balances to carry over are in the revolving category.

The majority of consumers with excellent credit pay their full credit card balance each month. Just 30% of super-prime borrowers allowed a balance to carry over to the next month, compared to nearly 70% of prime accounts, 80% of near-prime accounts, and about 90% of subprime or deep subprime accounts.