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A quick definition of asset is a useful or valuable thing, person, or quality.

Can a high credit score be thought as an asset ?

I am not asking what can I do with my credit score, I am simply asking, is it an asset or not. If Yes then up to what degree and if not then what attributes are missing.

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    Yes, it can be thought of as a form of asset. But obviously you can't sell it for cash. – RonJohn Sep 18 '19 at 13:49
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    What's the context - what's the point of the question? Are you trying to quantify the value of a high credit score? – D Stanley Sep 18 '19 at 13:57
  • Well yes, as per @RonJohn, but it is non transferable. Insomuch as it is something that is assessed when discussing financial health, credit score is as important as any other liquid or non-liquid asset. But again, non-transferable. – jsarbour Sep 18 '19 at 14:30
  • agree with @daytrader, it is semantics. It can be an asset and so also it can be an liability. – riya Sep 18 '19 at 19:03
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The answer comes down to semantics.

Common sense would lead you to "no" because most people think of tangible assets when referring to "assets" related to personal finance. Assets can usually be directly converted into cash somehow - i.e. a car, a house, etc.

If you want to use a dictionary definition and include intangible assets, it's more of a semantic argument but it's unlikely to help your financial situation. In this sense, you may include skills or personality traits as assets.

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Yes it's an asset.

No it's not a tangible asset.

You also likely won't be able to calculate a reasonable price for a specific credit score. It's an asset as much as an idea you have. Mostly negligible in value unless/until you can figure out what to do with it.

Edit: as per JoeTaxpayer's comment: It's an asset that provides value passively and could save you thousands of dollars over your lifetime.

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    I’m thinking you can add “it’s an asset in that over time it provides value, as compared to a low score. It fails in that it can’t be sold, it only has value to you.” I’d imagine one can perform a study and quantify the value. The value of getting a preferred interest rTe over ones lifetime is nothing to ignore. – JTP - Apologise to Monica♦ Sep 18 '19 at 18:25
  • Agreed. Even a quarter percent over the lifetime of an average mortgage is thousands of dollars. (.25% annually on $100k is ~$250 in the first year) – xyious Sep 18 '19 at 20:59
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    I sold (as a Realtor) a house to a client who was struggling to get past FICO 550. With that number, she got the loan, but it was over 1% higher than what i thought was "the going rate." With median home prices above $250K, we are looking at $2000/yr delta. – JTP - Apologise to Monica♦ Sep 18 '19 at 21:04
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A high credit score is not an asset. In fact once a person gets above "good" it is mostly meaningless. Also, during a moment of weakness, it may be a detriment.

Anything above good qualifies one for the best possible rates on mortgages, so no real help there. What is the real determinant is income. A person with an 820 credit score will not be able to buy a 600K house with a 40K/year income. While a person with a 650 score will if their income is in the 150k/year range.

With business loans it is all about the ability to negotiate, potential profitability of the venture, and the net worth of the borrower. Look at the qualifications for significant franchises. They typically require a large liquid net worth, and a higher overall net worth.

Even with car loans, your relationship with the financing company tends to trump actual credit score. Ford motor credit will allow you to have all kind of detriments on your credit report provided you are caught up with them.

So how can it become a detriment? Primarily at the auto dealership. A great credit score will allow you to significantly overpay for a car. A great salesman can prey upon a person's ego and sell them a car with all the bells and whistles when they might have been shopping for something more practical.

Also you will qualify for every "same as cash" deal that comes along. Fall for to many of those tricks, and the retailers will have all your cash.

At some point, you are just better off keeping your credit totally frozen as there becomes no need to borrow money.

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  • "Mostly meaningless... no real help there." People with excellent credit scores can get slightly lower mortgage rates than those with good credit scores, and saving one or two tenths of a percent on a mortgage is pretty significant. The fact that there is any benefit to having a high credit score vs a low credit score suggests that it is an asset by the definition provided. – Hart CO Sep 18 '19 at 15:03
  • Not to speak for Pete, but I think he meant there’s little difference in say, how a 750 customer is treated compared to 850. My own efforts to get our scores to 850 was purely experimental, I knew the last 100 points hardly mattered. (Pete will advise if I am misrepresenting his sentiment) – JTP - Apologise to Monica♦ Sep 18 '19 at 17:34
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    @JoeTaxpayer Yeah, I agree that there's a point of diminishing returns. I haven't inquired with my preferred lender on the topic recently, but in the past I had them run scenarios with 20-point credit score increments and the conclusion was rates stopped decreasing above 770 which is about halfway into the 'very good' range. I wouldn't advocate stressing out over credit score, but the notion that there is no benefit above 'good' is incorrect. – Hart CO Sep 18 '19 at 18:03

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