topic When I did the simulation in Understanding FICO® Scoring

Can I really go up 70 points in one month?

dlm0820 — Wed, 21 Mar 2007 19:53:12 GMT

I pulled a TU report a few days ago and ran a simulation on what my score would be if I paid all my bills on time for the next month and my balances stayed about the same (which they will). I was surprised to see that it said my score would go up a minimum of 70 points and a max of 110.

I find this hard to believe based on the fact that I have only been going up maybe about 5 points a month by paying all of my bills on time and keep the balance on my card low.

Is this realistic or is there something wrong with the simulation?

If you changed pools somehow (e.g. if an old late were sc...

Anonymous — Wed, 21 Mar 2007 19:57:54 GMT

If you changed pools somehow (e.g. if an old late were scheduled to drop off or something), it might be realistic, but I don't even get 5 points for paying my bills on time.

I think something may be wrong unless your utilization is...

Anonymous — Wed, 21 Mar 2007 19:59:31 GMT

I think something may be wrong unless your utilization is right on border line. Did you mistakenly choose two scenarios? I did get a 40 point bump in lessthan a month but that was paying off a card combined with a CLI

I think...

dlm0820 — Wed, 21 Mar 2007 20:04:21 GMT

I answered my own question. I had a tax lien on my file from March 2004 and the SOL might be 3 years in NY. I'm going to have to do some research on that. If that is the case, then that would make sense. All of util is about 15% each month w hich wouldn't account for that large a jump. All I did was run the scenario on my TU report asking what would happen if I paid my bills on time for the next 1 month. It might be taking into account the lien coming off also.

The statute of limitations has nothing to do with when th...

Anonymous — Wed, 21 Mar 2007 20:08:24 GMT

The statute of limitations has nothing to do with when the lien will come off your report. It only tells you how long they can sue you to recover. The lien should stay on the report for ten years especially if its a fedral tax lien.

I increased my score 30 points in 1 month

antredd67 — Thu, 22 Mar 2007 13:02:46 GMT

My score increased 30 points within one month:

TU from 636 to 666

Equifax 626 to 663

Experian 620 to 656

How did I do it? I paid down $7,000 of my revolving credit card debt on 3 credit cards getting all of the balances to about 30% of my credit limits. I was hoping that it would have increased more. But I realize that I still have one card where my balance is at 60% of my credit limit. This is still pulling my score down. Next month I am going to pay down that balance below 50% of my credit limit, and see what happens.

I will say this too. I have been enrolled in score watch for a full year now, and I have noticed that everytime I make a major purchase on my credit card, I was dinged as much as 10 points. When I applied for and got two credit cardS, that I didn't need, my score was dinged 8 points each time, and then my credit score started to rise as I continued paying my bills on time and as my other accounts aged.

I am going to slowly close my two newest credit cards (both opened within the year) since my oldest card is 10 years old now. It just appears to me that if you don't open up a new credit card, you haven't been late with anyone for at least two years, have credit cards at least 5 years old, and keeping your balances at about the 30% of available credit, you can have a minimum fico score of 700. I plan on beeing in the 700 club by September. I AM SO CLOSE.

Thanks

dlm0820 — Thu, 22 Mar 2007 14:24:49 GMT

Assuming that what the last poster said is accurate, that might make sense. It will have been a full 6 months since I've had my auto loan with on time payments for all of those months. I have also had my current CC for a little over 2 years, also with all on time payments and about a $1,000 credit limit. I just found it odd that all of a sudden my scores on the simulation would jump by so much as opposed to the other months that I pulled my reports and ran the simulation. They wouldn't even move when I did it then.

Edited: I also just thought of something....I have 3 inquires for my car that show up on TU and that will be 6 months ago at the end of March. I know that inquiries within the last 6 months are taken into account more than after the 6 months. Could it be that the Simulation is taking into account the 6 months being up and my score would go up that much because of it?

Hopefully the Sims are right and I can be in the 700 club by next month. I'm not holding my breath, but I'll just keep doing what I'm doing and pay my bills on time and keep my uti's at around 15%.

Message Edited by dlm0820 on 03-22-2007 07:24 AM

I think those simulations are bunk. I was promised my sco...

Anonymous — Sun, 25 Mar 2007 08:11:44 GMT

I think those simulations are bunk. I was promised my score would go up if I paid my bills on time, but it hasn't. Now if you get a simulation result that says your score is going to go DOWN, you can take that as Gospel, my friend. But go up? Heavens no. Not in your lifetime, anyway.

When I did the simulation

antredd67 — Sun, 25 Mar 2007 19:15:32 GMT

It appears to me that since I have various types of credit on my report, that helps me big time. I have about 8 paid off mortgage balances on my profile within the past 3-6 years. This is because here in California I was moving about every two years when my houses were doubling in value.I have a about 5 paid off car installment loans, and I have revolving credit, a very nice mix. What's hurting is the high line of credit that I have saying that i am at 70% UTI. Once I get that one down below 50% I should see my fico score inch up to the low 700s since I am very close.

When I play with the simulators, Fico's is right on the money when it says that my score would increase if I pay down $7000 of debt in one month. It said that my score would drop if I accepted the Wamu offer to considate all of my bills on that one account. I am sure I would be dinged the 10 to 20 points.

Just from reading everyone's posts and reading what your experiences have been, it doesnt take rocket scientist to figure out what we all need to do to be in that 700 plus club. Again, don't apply for new credit, pay down your balances where you have nothing higher that a 50% uti (preferably 30%), start paying cash or start using your credit card like a charge card, paying off the balances in full each month, DON'T BECOME LATE WITH ANYONE, and you will see your score increase and increase, AND INCREASE hopefully to the PRIME ELITE STATUS OF 720+.

Along about the year A.D. 32,023, if I work hard, I could...

Anonymous — Mon, 26 Mar 2007 05:49:35 GMT

Along about the year A.D. 32,023, if I work hard, I could probably get a credit rating of 840 or up, also known as ELITE FRIEND OF SATAN® status. If I sacrificed a couple stray cats it would probably help too.

Message Edited by TheNewWorldMan on 03-25-2007 10:49 PM

Utilization is a major score killer once you get to a cer...

Anonymous — Mon, 26 Mar 2007 18:40:07 GMT

Utilization is a major score killer once you get to a certain point.

And you're right, it's not rocket science. One of the major things to remember: banks are very conservative. Have some accounts open for a long time. Don't be late. Show that you can pay your bills and that you're not stretched.

They only have the numbers from your past behavior to go by. It's not a perfect predictor of the future, but it is a predictor.

For those who think otherwise, look at some of the aggregators of data from prosper.com, a microlending site.

Delinquent loans (credit grades, from excellent to bad: AA, A, B, C, D, E, HR, and NC)
http://www.lendingstats.com/loansList?originationFilter=0&loanStatusFilter=-1

Look at it versus a list of all loans:
http://www.lendingstats.com/loansList

You'll note that, while there are delinquencies in all credit grades, there's a higher default risk in the lower ones. Lenders are revising their criteria; Prosper has in fact re-graded the credit grades recently.

This is, so far as I know, the only openly available information about default risk by grade that normal people get to look at -- but it is very educational.

720+ is just the same as 800+

antredd67 — Tue, 27 Mar 2007 03:38:04 GMT

Newworld you have been making some valid points, and I don't know your age, but anyone under 40 y/o can't afford to play with their fico scores especially if that means on being dinged, and dinged, and dinged for not PLAYING THIS FICO SCORE GAME BY THE RULES.

Unfortunately, some of us lose a job, get divorced, get sick or what ever and that affects our credit rating when we can't pay our bills. But also, many people think that because they don't pay their bills on time, max out their credit cards, spend too much, yet living from pay check to pay check, on a 50,000 combined salary, gives them the right to do that, likes it's an American Right or something, and get mad when they find out that they have a low score as a result.

Since you are on here like the rest of us, it is very obvious that you care about your credit rating. I am not bitter about my fico score, and I am not made at the way this credit scoring system is set up. We just got to remember the game rules, and since I will be well dead when the year AD 32, 023 arrives, I h ope and pray that my Great, Great, Great, Great, Great, Great, Great, Great, Great, Great, Great to the 3rd power child will be smart enough to have a credit score above 800 because he Great Grand daddy to the 3rd power passed the important message down.

I'm 38, actually. And for me, it's easier to just find an...

Anonymous — Tue, 27 Mar 2007 08:45:28 GMT

@antredd67 wrote:
Newworld you have been making some valid points, and I don't know your age, but anyone under 40 y/o can't afford to play with their fico scores especially if that means on being dinged, and dinged, and dinged for not PLAYING THIS FICO SCORE GAME BY THE RULES.
Unfortunately, some of us lose a job, get divorced, get sick or what ever and that affects our credit rating when we can't pay our bills. But also, many people think that because they don't pay their bills on time, max out their credit cards, spend too much, yet living from pay check to pay check, on a 50,000 combined salary, gives them the right to do that, likes it's an American Right or something, and get mad when they find out that they have a low score as a result.
Since you are on here like the rest of us, it is very obvious that you care about your credit rating. I am not bitter about my fico score, and I am not made at the way this credit scoring system is set up. We just got to remember the game rules, and since I will be well dead when the year AD 32, 023 arrives, I h ope and pray that my Great, Great, Great, Great, Great, Great, Great, Great, Great, Great, Great to the 3rd power child will be smart enough to have a credit score above 800 because he Great Grand daddy to the 3rd power passed the important message down.

I'm 38, actually. And for me, it's easier to just find another place and start over than it is to wade through all this FICO scoring and wait year after year after decade for some number in a corporate database to inch up so that I can have decent opportunities in life. I'm still a young man, and I don't want to wait until I'm old and gray to have a backyard to barbecue in.

And to digress a moment, I don't think this whole corporatist FICO system in America is going to last too much longer. More and more people are getting madder and madder. America peaked around 1970, only deficit spending and slick politicians have covered it up. I think when enough foreclosure notices go out, eyes will be opened and a hard rain is gonna fall. The system America lives under requires a complacent population and cheap oil, and over the next twenty years both of those are going bye-bye. Between now and 2030 or so, America's moniker is going to change from "USA" to "WTF" I won't be here to see it. End of digression.

At the end of the day, I've got more important things to worry about than FICO. I got the ScoreWatch product and came here because I thought that FICO was something I have control over. Apparently it is not--it's like my genes, I can't help the fact my mother died from cancer and I probably got those genes, so why worry about it? God will punch my ticket when He's good and ready. And He will provide me with a way to get a home even though I have been cursed with a bad FICO for life.

Message Edited by TheNewWorldMan on 03-27-2007 01:45 AM

And why do you think it is that so many homes have been f...

Anonymous — Tue, 27 Mar 2007 15:38:59 GMT

And why do you think it is that so many homes have been foreclosed on in the last year?

Because we got into a bubble economy, fed both by individ...

Anonymous — Tue, 27 Mar 2007 19:50:24 GMT

@Anonymous wrote:
And why do you think it is that so many homes have been foreclosed on in the last year?

Because we got into a bubble economy, fed both by individuals' desperation and the bankers...and plenty of greed to go around. Having a population uneducated in the fundamentals of economics contributed, too.

During the late Nineties up to last year or so, you had housing prices soaring 6-12% a year. Figuring the increases would go on forever, people moved off the sidelines to join the housing market and buy in. Banks stepped up with larger loans. With more money chasing houses prices accelerated more. People got more desperate to "buy in while they could" and bankers stepped up with larger loans. That's when the subprime phenomenon kicked in. And so you had a housing price and credit spike that looked like Al Gore's famous "hockey stick" global warming chart.

But of course, a house isn't a magical font of equity money...it's a small plot of land, and some timber, glass, paint and concrete with some labor thrown in. And the true market value of these commodities hasn't doubled, any more than Dutch tulips all of a sudden were truly "worth" a year's salary when that bubble raged. So sooner or later people wake up and say, "Gee, this house isn't REALLY worth twice what it cost in 1997." Once that propagates throughout the economy, say good night to your housing bubble.

Many people defaulted on their mortgages because they cou...

Anonymous — Tue, 27 Mar 2007 22:36:07 GMT

Many people defaulted on their mortgages because they couldn't afford them. Their lenders approved them for way more than they could afford, and they couldn't make the payments. That's why lenders are raising the minimum scores for 100% financing. Credit history is important.

And that's another reason I'm buying a home abroad...in t...

Anonymous — Tue, 27 Mar 2007 23:21:25 GMT

twnkltoz wrote:
Many people defaulted on their mortgages because they couldn't afford them. Their lenders approved them for way more than they could afford, and they couldn't make the payments. That's why lenders are raising the minimum scores for 100% financing. Credit history is important.

And that's another reason I'm buying a home abroad...in the coming months we're going to see a pendulum effect. The system will over-react (it always does) and we'll go from mortgages being handed out like candy on Halloween to practically NOBODY getting approved. Banks are going to shy away from high and even medium-risk loans...you'll have to have the credit rating of Satan Himself to qualify for a mortgage. And since for me that's, oh, about thirty years away, it ain't gonna happen.

The one plus side to this for potential homebuyers is that by 2008 to 2009, with all that jive mortgage money pulled from the housing market, demand will slump and housing prices will plummet. So if you're more fortunate than I am and you have $30,000 or so of cash, or a nosebleed credit rating, you'll be able to get yourself a great deal on a home.

Housing Bubble Bursting

antredd67 — Wed, 28 Mar 2007 01:03:37 GMT

Newworld is very right in that I don't see the housing market ever skyrocketing again the way it did in the late 90s to 2004. I was one of the blessed home owners who bought his first house in sunny southern california in 1996 and after 2 years had a $50,000 profit check on that home sold, traded up to a larger home and received a $150,000 check, and traded up to an even larger home receiving a $210,000 profit check being in that house just 18 months. So from 1999 to January of 2005, my family and I were buying and selling our home every 2-3 years. With that said and as blessed and fortunate as I was, I had no clue being then in my late 20s, early 30s, and mid 30s what having good credit meant.

Just turning 40 this year, one would think that my Fico score should be well into the high 700s. But the mistake I made was that I didn't want to pay cash for anything when I had the credit to do it. A mistake that many of us 20 and 30 somethings make is wanting things now and not having the patience to wait or pay cash for it.

Call it spluring or plain stupidity, but the truth of the matter is that, if you care about your credit rating, then all of that charging, living above your means will catch up with you.

Joining this forum has allowed me to see the light as long as we play by the Fico scoring rules. So I am not discourged because I see my score rising when I play by the Fico rules.

Isn't it funny how we can all get omething that can virtu...

Anonymous — Wed, 28 Mar 2007 01:11:04 GMT

Isn't it funny how we can all get something that can virtually ruin our lives if not handled correctly but no one ever tells us that FIRST. Most people who visit these boards started doing so to trying to figure out how to dig out of the mess they found themselves in. For me it was rebuilding credit I totally destroyed.

The first time I pulled a three in one, I literally wanted to cry. I actually winced when I saw the numbers. Now I love all my alerts because every time I get one it goes up, when It goes the other way I know why and I know not to panic.

I filed bankruptcy and decided, it wouldn't happen again. I know several multi filers who just don't seem to get, the Burger king burger is not worth a 35.00 overlimit fee.

Message Edited by Brammy on 03-27-2007 09:11 PM

Yeah, I was born a little too late for Peak America...I d...

Anonymous — Wed, 28 Mar 2007 01:26:02 GMT

Yeah, I was born a little too late for Peak America...I didn't get to the table until they'd taken the punchbowl away.

I just find it incredible that my financial life is hosed and I'm blacklisted over less than a thousand dollars in bad debts. I could understand if I'd been a high roller and blown tens of thousands of dollars and had repos and foreclosures. But it was a phone, dental and power bill for God's sake! It could have happened to anyone who found themselves on hard times. And yeah, I can understand it bumping my credit score for a couple years, but to be blacklisted for LIFE?

You should really see the movie Gattaca if you haven't already. In the movie, everyone's privileges in life were determined by genetics. Well, that's what America is moving toward, only instead of DNA you've got FICO. And once you're "IN-VALID," you're hosed for good.

My honest advice for any American with serious marks on their credit who wants to buy a home is to EMIGRATE. There's a whole world out there where people live free of having their names blacklisted in government/corporate databases. Get out while the dollar is still worth something and you're still young (or in my case, in the early stages of middle age). The folks running FICO want an America full of blessed "beautiful people," with surveillance and our every move documented in triplicate, fine, let them have it. There's a lot more of us than there are of them, and when you get right down to it, they need us more than we need them.