Why One Point Can Matter
Sullivan further notes that there’s a very good reason that, at least in terms of the interest rate, even a single point can make a big difference.
Lenders need to stick to thresholds when deciding the terms of a loan to mitigate risk.
So while a one point drop may not prevent you from getting approved for a loan, "lenders are going to be firm about even a single point when it comes to your rate."
All Scores Are Not Created Equally
Of course, credit score calculations don't tell everything about a particular borrower. A one point boost to a certain threshold may be insignificant if there's a particular blemish on a person's credit history.
Tayne raises the example of two different clients, both of whom have the same credit score -- but one has a tax lien.
"Tax liens hang around even after they're released and they show that you have trouble meeting your obligations," she said. What this means is that the credit score, while to some degree a "gatekeeper" for certain loan services or even rates, isn't the end-all, be-all of loan products. The same two people can have the same two scores but be unable to access the some one loan service.