Super-Prime Credits: What It Means, How It Works, Interest Rates

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.

Key Takeaways

  • Consumers with super-prime credit have credit scores at the highest end of a credit bureau's score range.
  • Consumers with super-prime credit have an excellent credit history and are the most likely to repay what they owe.
  • Credit card companies, banks, and other lenders will generally offer their best loan terms and interest rates to their super-prime customers.
  • A consumer’s credit score and classification as super-prime, prime, near-prime, or subprime can vary by credit bureau due to the different methods used by the bureaus to calculate credit scores.

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. TransUnion and Experian's ranges are 300 to 850. 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 2021, the Consumer Financial Protection Bureau (CFPB) released its biennial report, "The Consumer Credit Card Market." The 177-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 2020 year-end balance on their general-purpose cards of just under $5,000. This is significantly less than consumers with prime credit, who had an average balance of around $8,000. For private-label or store-branded credit cards, super-prime cardholders averaged slightly over $1,000 in debt while near-prime cardholders averaged about $1,900 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. About 40% of super-prime borrowers allowed a balance to carry over to the next month, compared to roughly 80% of prime accounts, 85% of near-prime and subprime accounts, and about 90% of deep subprime accounts.

What Is Prime and Super-Prime Credit?

Prime credit includes credit scores in the range of 660 and 719 whereas super-prime credit includes credit scores of 720 and above.

Why Is It Best to Have Prime Credit or Higher?

Having prime credit or higher signals to lenders that you are likely to pay back the money you borrowed and not make late payments or default. In essence, you are looked at as a safe person to lend money to. This increases the chances that you will be approved for a loan and that you will receive a good interest rate.

Why Is It Better to Buy on Credit?

It can be good to buy on credit as it builds your credit history, which you need when you want to take out a mortgage or other loan. Additionally, many credit cards come with perks, such as cashback or other rewards. It's important, however, to make sure you pay your credit card bill in its entirety every month to avoid accruing interest charges on your credit card.

The Bottom Line

Having the highest possible credit score serves your best interest as it improves the chances of you receiving a loan, mortgage, credit card, auto loan, or any other credit. In addition, not only does it improve the likelihood of approval, but the better your score, the better interest rate you'll receive, which reduces your costs over time. To improve your score and maintain a high one, pay your bills on time, keep a low level of debt, have a good debt mix, and avoid late payments and defaults.

Article Sources
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  1. Consumer Financial Protection Bureau. "Borrower Risk Profiles."

  2. Equifax. "What Are the Equifax Credit Score Ranges?"

  3. Experian. "What Is a Good Credit Score?"

  4. TransUnion. "What Is a Good Credit Score?"

  5. myFICO. "What is a Credit Score?"

  6. Consumer Financial Protection Bureau. "The Consumer Credit Card Market," Page 19.

  7. Consumer Financial Protection Bureau. "The Consumer Credit Card Market," Pages 29, 31.

  8. Consumer Financial Protection Bureau. "The Consumer Credit Card Market," Pages 73-74.

  9. Consumer Financial Protection Bureau. "The Consumer Credit Card Market," Page 77.

  10. Consumer Financial Protection Bureau. "The Consumer Credit Card Market," Page 22.

  11. Consumer Financial Protection Bureau. "The Consumer Credit Card Market," Page 34.

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