FICO Simulator inaccurate?

[Anonymous]

According to the FICO simulator, if I paid off a past due credit card with a balance of $392, my FICO score would go from 550 to between 580 and 620. It only went to 559. Why the big disparity? I know 580 isn't all that great, but it would have been enough for us to qualify for an FHA loan with just the 3.5% down payment. Can anyone explain why my score didn't get to 580? We haven't done anything else that would have kept the score from going up. Thanks.

[llecs]

I haven't studied the simulator enough to comment on it, and only guessing here, but I think it assumes that the negative past due comment on that CC would go away with the payment. Unfortunately it doesn't. I'd call the CC and ask them to remove any lates and/or comments (e.g. if it ever became a CO, then ask to remove "paid charge-off" or "settled for less than full" if settled).

[Anonymous]

I have found it to be way off as well, of course on the side I didn't want, lower than their min projection and nothing changed but paying all bills on time and paying off card balances.  Also, if I am not mistaken, I believe the new requirement for an FHA loan is 640.

[Anonymous]

No. FHA lowered the minimum to 580 for 3.5% down payment. The trick is finding a lender who will do it. Wells Fargo is one, and I found one other in the Portland, OR area.

[RobertEG]

The FICO simulator does not provide the ability to input one change in your credit profile, and see the instantaneous result of that one factor.

That is not its intention or usefulness.

If the simulator were to permit this, it would be a piece of cake to reverse-engineer the FICO scoring algorithm.  Since the specifics of the algorithms are a proprietary trade secret, the simulator only permits simulations over a period of time, and takes into account changes in additional scoring categories other than the category of the single change.  For example, paying down debt over three months also takes into consideration the concurret aging of the accounts over that period. You cant input one factor, and see the isolated results on your score the next month.

It is a medium range estimator, with many assumptions built in.  It is not a monthly score simulator of the impact of changes in individual items.