topic Re: Simulator shows score decrease for paying down cc debt? in Understanding FICO® Scoring

Simulator shows score decrease for paying down cc debt?

cr101 — Thu, 26 Dec 2019 17:03:59 GMT

I can see how paying off all of my cc could lower my score, but how could paying off just some of it lower it? Can someone explain the rationale?

What's even more confusing is that the service that I'm using says that the negative things impacting my score are credit used and available credit.

Re: Simulator shows score decrease for paying down cc debt?

SouthJamaica — Thu, 26 Dec 2019 18:51:42 GMT

@cr101 wrote:
I can see how paying off all of my cc could lower my score, but how could paying off just some of it lower it? Can someone explain the rationale?

What's even more confusing is that the service that I'm using says that the negative things impacting my score are credit used and available credit.

There is no way in which paying off some of your credit card balance could lower your score.

Re: Simulator shows score decrease for paying down cc debt?

NRB525 — Fri, 27 Dec 2019 00:57:22 GMT

OP which simulator are you looking at?

Re: Simulator shows score decrease for paying down cc debt?

cr101 — Fri, 27 Dec 2019 01:14:55 GMT

@NRB525 wrote:
OP which simulator are you looking at?

capital one credit wise

Re: Simulator shows score decrease for paying down cc debt?

thornback — Fri, 27 Dec 2019 01:21:29 GMT

@cr101 wrote:
@NRB525 wrote:
OP which simulator are you looking at?
capital one credit wise

CreditWise provides your Vantage 3 score, not FICO. Vantage is an entirely different scoring model that doesn't respond to changes in your credit in the same manner as FICO. Your FICO scores will not drop from paying down your balances,

Re: Simulator shows score decrease for paying down cc debt?

Anonymous — Fri, 27 Dec 2019 01:30:34 GMT

+1 @thornback

Fico and Vantage has different triggers that affect your score.

Re: Simulator shows score decrease for paying down cc debt?

cr101 — Fri, 27 Dec 2019 02:38:24 GMT

thanks for the insight. i still think that it's odd that (if the simulator's correct) the score would decrease, even if it is a vantage score.

Re: Simulator shows score decrease for paying down cc debt?

thornback — Fri, 27 Dec 2019 03:00:03 GMT

It is odd. But, unfortunately, because Vantage is not used by many lenders to make credit decisions (only Synchrony, I believe, uses it - that we know of), we don't have much data gathered to analyze what makes it tick as we do with FICO. There's possibly a util threshold which, should utilization percentage drop below, triggers a 'lack of debt' penalty in the scoring algorithm - in a similar way FICO penalizes for all zero balances. We just don't know what that threshold is - or if that's even the case really...

Re: Simulator shows score decrease for paying down cc debt?

Trudy — Fri, 27 Dec 2019 03:44:00 GMT

To add to all of that Synchrony uses Vantage 4 and Credit Karma uses Vantage 3, both versions of Vantage can result in different scores with the same information, same as FICO is different from both of them which is the most common used score. Different models. Vantage is seldom used for credit decisions. My synchrony score (TU - V4) vs my Credit Karma score (TU - V3) is different, both being 2 different versions of the Vantage model with the same information.

And simulators are mostly unreliable due to an individuals unique credit profile, regardless of how they occasionally come close. You will likely have a better idea of how your score reacts from the many forum members input who study this stuff. I'm not one but a review of hundreds of post, they are always closer to the actual outcome than a simulator.

As some have already noted, there is no way reducing your UTL only (not to $0 and with no other changes) can result in a point loss with FICO scores.

Re: Simulator shows score decrease for paying down cc debt?

Anonymous — Fri, 27 Dec 2019 17:10:44 GMT

Key words "IF" the simulator is correct. They usually are not.