Huge actual drops...simulator shows unreasonable rises between reports...What is realistic?

[Anonymous]

So I got a report last month, on the 16th of March.  A couple accounts I had opened didn't show up.  Scores were 639 / 617 / 649.  (Yeah, they're bad...working on it).

Looks as though some accounts I had opened beginning of March didn't show up at that time.  I've been using a couple of the cards, one for gas and another for furniture we needed.  Spent 700 on a 750 limit, and about 550 on an 800 limit.  Cleared up a negative (had it removed) on transunuion, brought  that score up a couple points.  Late payment fee caused a $300 card to go $20 over limit as I forgot to pay on Friday and my date was Sat--but card would not hit as 'late' on the report.  That was a 16 / 17 point drop on Equi / Exp.   

Monday I paid 300 on the 750 card, 200 on the 800, and the one that was over limit by 20 I only owe 95 on now.  All my other cards now have a balance lower than what they were when I pulled the report 16 March.  

I pulled another report yesterday, 4/26, and none of those payments appear to be applied yet.  Scores are 615 / 611 / 619.  No late payments, car & personal loan have seen balance decreases as I've paid them.  

So I try the simulator, and enter in everything I've put into all my cards between the two reports and pull the slider to $800 of $2,263 on the balance slider, and 1 month on the timeframe slider.  I paid more than that, but I use them for parking and tolls and etc for work so I think that's reasonable on both sides for illustrtive purposes.  

My confusion is that the simulator says my scores should go to 650 / 636 / 654.  How likely is that?  That seems a bit unrealistic to me.  Anyone have any input?

[Anonymous]

Simulators are garbage.  Never trust a thing they say.

$800/$2263 = 36% utilization.  Is that what you are coming down from or what you are ending up at?  I'm assuming that's what you paid your cards down to.  The question is what that $800 number was prior; what were your reported balances before paying down your cards?  The reported balances are the numbers you saw on your credit report when you said it appeared that your new (paid down) balances hadn't shown up yet.  Based on these numbers you can get somewhat of an idea of where your score may go.  The thresholds for utilization are believed to be at 9%, 29%, 49%, 69%, 89% - any time your overall and/or individual utilization crosses one of those thresholds a scoring change should happen.  

What you want to do is get your utilization down below 9%.  On your $2263 in limits, that's getting your total balances under $200.  If you can keep your total balances under $200 across all your cards, you'll be in a much better place.  Ideally, your end goal should be to have only 1 of your cards report a small balance ($5-$10) while all of your other cards report a $0 balance.  That will maximize your scores under the utilization sector of scoring.

[Anonymous]

Thanks for those threshold percentages, that helps a lot.  Looking at what was showing on the reports as far as balances is what I probably should have included.

Mar 16 Report:  565 used, 2650 available spread over 6 accounts for a utlization of 21%.

Apr 16 Report:  2126 used, 3450 available spread over 7 accounts for a utlization of 62%.

ACTUAL based on statements this morning after payments credited:  1451 used, 3450 available spread over 7 accounts for a utilization of 42%

Obviously utilization is better as reported for Mar than Apr, and I'll get that down a little more after I get paid again.  The goal is to "put a few to bed" and not use them again.  I won't be able to get enough paid to make it back under the 29% threshold in order to beat the next reporting which should happen within the week I believe.  

I admit, I was hoping that the simulator was somewhat close.  I'm not looking to be above the Mar report as the simulator indicates, but at least equal to it especially considering its using FICO data that FICO generated on the FICO site.  Honestly, if the simulators can't be trusted then they should be removed as they offer a bit of false hope.  I'd get it if they were external, but its FICO's simulator based of their own data...if they can't get those computations right makes me wonder what other calculations they're scrweing up.  But I digress.

Thanks for the help.  What kind of jump should I expect to see once they report?  Is there a way to calculate that with some semblance of accuracy?  Student loans, personal loan, and car loan have all seen another month of payment on top of it all, I would hope that means something.  

[NRB525]

While simulators are not the most accurate tool, the general direction indicated by the simulator is probably fairly close. They are not garbage, it is just that in most people's files, the file gets more complicated as time goes on with other factors stepping in, such as credit applications or changes in credit line or utilization, not just the pristine "one change" that we give the simulator to work with.

Asking it to get that specific in one month might be asking a bit much, but then, you haven't gone a full month since the simulation to tell for sure, have you? I would not give up on that sort of increase in your scores. I won't say it is guaranteed because the simulator said so, but with the change in utilization, you have to let it play out to see, and that update by the bureaus to the score may take some time to be fully realized. Usually you have to wait for the card statement to cut, then several days after that, for the updated information to get to the credit bureaus to even be considered in the score, and that is not even guaranteed to trigger a score change.

As to managing your reported balances to such a low number, I would not do that. Unless you are prepping for a mortgage app (and if you are, you are monitoring the wrong FICO score version) then the micro-management of $2k of credit limits is a frustrating use of time. Just try to keep them from going over limit, and pay on time. If you see an application coming up, then manage the utilization down if you want to.

Which cards do you have, and what are their limits? Sometimes there are methods to get SP CLI on some of the cards, but not always.

[Anonymous]

I already have a mortgage app in for VA loan, and are moving forward, and the drop in scores has me worried.  I was close to the threshold as is for the mortgage scores, and saw them decrease as the fico 8 scores went down below that threshold (577, 600, 601 down to 565, 588, 596).   I'm assuming if they went down becusue the 8 went down, then they'll go up with the 8 go up.  I know all my balances and limits and all are low but that just makes it feel like (and is likely the case) that any change becomes magnified.  Only less than 1500 in CC debt so relatively easy to clear, but still.

So just a wee bit stressed.  Closing is in 2 months and they're still using my March credit report, and I know there is some recovery time before they pull again, but still has me concerned. 

Cards are:  

                          Bal      Limit   Util

Big Lots             400     750    53%
Lowes                 0       300      0
Paypal           143.66    300    48%
FNCC            237.15    500    47%
Cap 1              93.79    300    31%
Cap 2             177.37    500    35%
Wawa Gas     398.72    800    49%

I expect to have almost all the cards paid off in the next 60 days...expect the end state to be the gas card will almost always report a 200 balance and the FNCC card will generally show about 100 on it.  These will be use/pay month to month for commuting expenseses (gas, EZ Pass, parking garage, etc) since I do not want to use my debit card for these.   Doubt I'll ever use lowes, and won't use big lots again when paid (60 days same as cash for a single purchase only reason i got it).  Won't use/carry a balance on any of the others.   

The bump the simulator shows by paying ~800 between CC reporting makes me optimistic, but I want to be realistic.  If its close, great...I just need to be back at 600/601 for at least two of the mortgage scores (they're using 601 from Exp.).

[HeavenOhio]

Obviously, funds are an issue, But I'll describe the ideal.

Ideally, during a mortgage app, you should have all cards reporting a zero balance except for a small balance on one major card. That would bring your total utilization to under 9%, and you'd only have one card reporting.

To pull that off, the way to handle the gas card would be to pay it off as you go, and to ensure that it reports zero, charge the end-of cycle tank of gas to a different card. If a retail card is the only one to report, it's not as effective as having a major card reporting.

Tollway charges like to fly in whenever. One option is to ensure that they're on the card where you intend to report a balance. Another would be to submit a manual payment a few days before statement closing so a charge doesn't happen if you're trying to reach zero.

[NRB525]

Ok, so there really is a Mortgage Application that you are working toward. That does indeed change the urgency to pay down these items. Your first two posts did not indicate such an app was the real reason for your question.

Pay them all to zero except one.

When did each have the last statement, as an estimate for when the next statement will come around, because you want to start strategizing when to pay each to zero and stop using them for a few days while the statement calculates.

Regarding use of the cards, you aren't going to use the Lowes even though they offer you 5% off on purchases if you happen to need something there, as either an existing or a new home owner? And if you do plan to make any purchases there, it may be possible to increase that Lowes credit limit with a SP request. That higher CL can help with your utilization calculations.

[Anonymous]

I'll have to go back and look at actual statment dates, but belive the majority are between now and the next week or two.  I may be able to zero out one or two of them by them but not all.

No, I'm not planning to use lowes...I do prefer paying for cash because I worry something comes up as always seems to be the case.  And I'm a vet, and they give 10% dicounts all day every day so there is no incentive to use the card for discount.  Only thing I might use the card for would be a riding mower, but the yard isn't big enough so that one need kinda goes away.  And I prefer Sherwin Williams for paint rather than what Lowes/Home Depot sells.

I've seen the request for credit increase be something recommended before...doesn't that hit the credit report?  I'd hate to request an increase, take a point drop, and then still not be approved for an increase.  

Didn't mention the house, because my main questino was the accuracy of the simulators...but yes, the concerned about the loan is why I care about the simulators.

[HeavenOhio]

A soft-pull credit limit increase won't hurt anything. Avoid hard-pull CLI requests during the mortgage application process and all the way through closing.

the myFICO simulator does a really lousy job with CLIs. I think it assumes a hard pull on every bureau and subtracts an unrealistically high number of points for the pulls.

[Anonymous]

Figured I would give a little update.

Scores per myFICO, today, are:

647 / 625 / 649.  I did take the advice and request a limit increase on a couple of cards, only one was granted but took the balance from 300 to 400 and no doubt that helped with ratios.

so pretty close to what the simulator said, but from what I can tell all cards have NOT reported thru the website despite new statements all being issued at some point during the past 3-4 days (I realize there is likely a delay from the creditor, then to my report, then to the web).  So this may change yet, even this week.  I have 3 cards left to report new balances, but I suppose it is possible that may not have happened yet.  I won't know for sure until I pull an actual report, but I likely won't pull a new report until June, and that is when my quarterly report is available.  Its also a week or so before closing, so it should even be better yet as the goal is to have all but a couple cards paid completely off (one for gas, one for parking/ezpass).

So that leaves me feeling very optimistic, as the scores are higher than where I started with when they pulled for my mortgage application.  

I'm going to keep on keeping on, and hopefully, maybe, I could be cresting 700 by the start of 2018!