Super-Prime credit is used to describe people with stellar credit records that are so pristine. That they are offered the best available terms by creditors. The term “Super Prime” credit came on board during the recession. When creditors wanted to restrict lending to such a tiny slice of elite customers that the old term “prime” was not good enough. There is no exact score that divides the super-prime tier of credit. From its lesser credit cousin prime and subprime. Thus it depends on the product and each creditor sets its own rules.
Understanding Super-Prime Credit
Each of the three major credit bureaus which are Equifax, Experian, and TransUnion has its own credit score range. For Equifax, it’s 280 – 850. For Experian, the range is 300 –830, while for TransUnion it is 150 – 950. So having a super-prime credit means having a score that is near the top of these ranges.
In most cases, consumers with super-prime credit will have access to better loan terms. As well as lower interest rates because of their stellar credit. Now, 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. But in the 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.
However, understand that 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 some different information since some lenders only report to one or two of the three bureaus. Two, each bureau makes use of a different method for calculating credit scores. Thus a result of a consumer that one bureau considers as super-prime might be classified as prime by another bureau.
Features of People This Credit
The Consumer Financial Protection Bureau (CFPB) in August 2019 showed its biennial report, “The Consumer Credit Card Market”. The 193-page reports a list of a variety of facts as regards Americans who have super-prime credit scores, which is defined as a credit score of 720 or higher. This report shows details that may be useful to whoever is looking to join the elite ranks of those with high scores.
The CFPB report shows that super-prime cardholders had an average 2018 year-end balance on their general-purpose cards of about $5,000. Now, 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 are slightly over $1,000 in debt while near-prime cardholders are about $2,000 average in debt.
Often, 95% of super-prime cardholders are known to have at least one credit card and on average they have four open credit card accounts. Now credit card companies issue credit to super-prime consumers by issuing them almost half of all new credit cards.
Even with access to credit, consumers with good credit do not max out their credit cards. The CFPB report shows that most of the growth in credit is accounted for by unused lines on accounts held by consumers with super-prime scores.
The CFPB also report categorizes credit card accounts as being either “transacting” or “revolving”. Cardholders who pay off their accounts in full before the next credit cycle begins fall into the transacting category. Cardholders who don’t pay their accounts in full and allow balances to carry over fall in the revolving category.
Consumers with credit pay their full credit card balance each month. Only 30% of super-prime borrowers carry a balance over to the next month, as compared to nearly 70% of prime accounts, while 80% of near-prime accounts, and about 90% of subprime or deep subprime accounts.
On the whole, the super-prime clique of borrowers would require good credit habits and discipline.