My lender is using a program called CreditXpert to tell me how much my scores would rise based on doing different things. basically, it is a credit score simulator. Does anyone know how accurate it is?
according to this program, my scores can go up like 50 points by paying off a couple of 6 year old charge offs for 600 and 800. Does that sound right?
Unless they are pay for deletes AND your only baddies, I don't see how that's accurate. Paying a charge-off or collection will not improve your scores. It would only make you look good in manual underwriting.
We use CreditPlus as our credit vendor. They have a similar program called Credit Wizard. I don't think I've heard any loan officer say to someone to pay off a collection to raise their score, not saying it wouldn't work in the OP's situation. Usually the request to pay off a collection or debt is an underwriting condition to free up DTI space. Some things I have heard, "go open up a credit card and charge a tank of gas on it" and "go buy something for $40 at Walmart" (not saying the OP should do this). Some of the simulations are pretty interesting, but they do seem to work, especially if you need to bump just a few points higher for approval or better rates. They do a rapid rescore at that point.
I am currently in this situation. My lender talked to someone at the credit bureau and they both said if I pay off my old Macys card that I would get a 60 point jump. Macys was a charge off. Macys said that it was in collection though? Anyways Macys was reporting 163% utilization. I paid it off to 0 and I'm waiting to see the jump. Hopefully It will be substantial