Score Stimulator confusion

[strong_lady]

I know this question may have been answered already.. but I could not exaclty find what I was looking for so here goes.  I notice on the score stimulator.  You get higher points for paying off your bills month by month then paying in full?  Does anyone know why?

Also... it seems like your credit socre goes up if you pay off the bills (according to the stimulator) .. even though I have read and have been told that your credit score will not go up unless you can get a PFD?  as well as having the account deleted from your credit reports.

What gives?

[marty56]

This is one of the things I dont like about the simulator.  You dont get FICO points for paying a balance off over time.  You get points (or dont loose any) by paying those balances you do have on time.  If the balances are 0, you dont loose points unless you have no CCs reporting a balance.

These days, revolving any CC balance is not a good idea unless you cant afford to PIF.  While the best # of CCs reporting a balance is subject to debate here, I can say that keeping util at 9% or lower on as few CCs as you can gives you the best bang for the buck FICO score wise. 

My scores do best with 1 CC reporting a balance.

[Anonymous]

It is because you gain points for accounts aging and payment history each month.

[Anonymous]

All accounts will age no matter what the Bal is.  Your UTIL is what counts.  If you have several CCs reporting a Bal  and the PIF one you should see a small increase in scores. A higher point gain if you PIF a large amount.

FICO likes to see some CCs reporting a Bal $0  and some with a small Bal.   Just be sure to keep the CCs active!

Message Edited by HappyDays on 01-10-2009 10:05 AM

[Anonymous]

The reason the simulator shows higher point raise if paid over time, though, is because if you pay it all off now, you are only getting the points for the util. reduction, and not the ones from age and history.

Message Edited by forevergroovy on 01-10-2009 02:45 PM

Message Edited by forevergroovy on 01-10-2009 04:24 PM

[Anonymous]

I once paid all my accts to zero and my scores went down.

[strong_lady]

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@Anonymous wrote:
The reason the simulator shows higher point raise if paid over time, though, is because if you pay it all off now, you are only getting the points for the util. reduction, and not the ones from age and history.

Message Edited by forevergroovy on 01-10-2009 02:45 PM

Message Edited by forevergroovy on 01-10-2009 04:24 PM

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Thanks to everyone for posting but the only thing is alot of the accounts that I have are bills that I owe on and collections that need to be paid off.  I am trying to get PFD and already got one sucessfully deleted and four on the way to get deleted but Im still trying with the others.  So basically it is saying on the score stimulator if I pay down xxx amt of money a month my score will go up... but I thought this did not happen unless you get a PFD..as far as I know paying a collection or acct and it staying on your report even when it is updated to "paid in full" the score will stay the same.... Right???

What I am trying to understand is it seems like my score will go up.. if I pay off bills that I owe then get a PFD... that is what I am so confused about... I am trying to figure out if I should just keep trying to PFD on these accounts or just pay them off every month until paid... Of Course I want my fico score to go up though ... however... the only way to see a increase is to do  PFD which is what I have been told numerous times, right?

[SCF]

Hey strong lady,

You are correct in that a paid COLLECTION account and an unpaid COLLECTION account are scored the same by FICO.  This means that the only way to improve your FICO score in relation to CAs on your report is to do a PFD and have them removed entirely.

The simulator is assuming that you pay all of your regular (still held by the OC) accounts on time, and reduce your utilization, which are actions that will also improve your score.  It also takes into account the age and history issues mentioned above.

Does that clear things up?  Reading over it I'm not sure if I got it all out right, but hopefully you can see what I mean. 

[strong_lady]

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@SCF wrote:

Hey strong lady,

You are correct in that a paid COLLECTION account and an unpaid COLLECTION account are scored the same by FICO.  This means that the only way to improve your FICO score in relation to CAs on your report is to do a PFD and have them removed entirely.

The simulator is assuming that you pay all of your regular (still held by the OC) accounts on time, and reduce your utilization, which are actions that will also improve your score.  It also takes into account the age and history issues mentioned above.

Does that clear things up?  Reading over it I'm not sure if I got it all out right, but hopefully you can see what I mean. 

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SCF

Yes it does clear things up, I understand now. Thank you  .... Im going to keep working on these PFD's

Strong