Fico Score simulator and Fico mortgage score rebuild

[Anonymous]

Just to throw a number out there, I'd say the OP ventures to gain around 20 points from his recent utilization pay down from the teens to single digits.  I think the 35 point game suggested by the simulator is a bit high based on you crossing one threshold.

[Anonymous]

So if I pay down from 18 percent to 7.5 percent utilization, compared to paying down from 18 percent to 1 percent, it won't make a big difference?

[Anonymous]

What do you mean please explain, if I bring down all my balances to 0 and just leave one card with a balance, what would be left to optimize?

[HeavenOhio]

Sharaby03, you've accomplished the first step. Once your overall utilization is at 8.9% or below, that portion of your score is optimized.

The next step would be to reduce the number of cards reporting balances. Right now, it appears that three of your five cards have balances. Bring that down to one card with a small balance with the other four reporting zero.

Also note that you don't have to pay interest to report balances. Always pay in full. Balances that report should come from new charges.

[Anonymous]

Okay so for my understanding bringing overall utilization down to 8.9 percent or bringing it down to 1 percent it's the same as far as how much it will be optimized, so the only thing left to be optimized is bring each separate cards down to 0 utilization and leave 1 with a small balance right?

[HeavenOhio]

Right.

[HeavenOhio]

I forgot this one caveat. When reporting the small balance, make sure it's at least $5. Some lenders like to forgive very small balances rather than bothering to bill you, and the card ends up reporting zero.

[Anonymous]

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@Anonymous wrote:
So if I pay down from 18 percent to 7.5 percent utilization, compared to paying down from 18 percent to 1 percent, it won't make a big difference?

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Correct.  It would not make a big difference and most would even argue that it wouldn't make any difference in terms of scoring.

[Thomas_Thumb]

For those that like to test simulators, check out this one from ZilchWorks. It is based on user inputs only. No need to provide personal information.

It does show a score drop if avaliable credit is equal to credit line (e.g. 0% utilization). Top scoring option is 10% utilization. The data entry only allows selections from a drop down menu - this limits UT% to increments of 10%. This calculator does provide options to look at incluence of age of oldest up to 10 years - which is likely a ceiling beyond which primary value of added age is impact on AAoA. 

Interestingly this estimator, says an auto loan would help my score in addition to the mortgage loan. I do suspect it would boost my enhanced Fico scores - particularly Fico 9.

When looking at how the estimator treats a negative factor, I would say results are fairly accurate for a 90 day late. The one size fits all is less reliable for a tax lien or foreclosure.

http://www.zilchworks.com/credit-score-calculator.asp

Shown below is impact of a 6 month old 90 day late and after the late ages to 5 year (with age of oldest reaching 10 years)

 

Sidenotes:

1) My oldest account is active so this estimator may be a bit more accurate for me than for someone with a closed oldest account that is much older than their oldest active account.

2) My file is clean which probably helps in generating a more accorate estimate because it lumps all negatives together and ignores minor 30 day and 60 day lates.

3) The simulator under predicts by Fico 8 scores but, splits the middle on Fico 04 scores.

[Anonymous]

TT, that simulator above gave me a score about 70 points below my FICO 08s.

Question number 4, IMO, is the one that throws it off as it asks your oldest "active" card, loan, etc.  This tells me that the simulator doesn't take into account closed accounts, so it significantly reduces what it considers your length of credit history. 

Interesting too, but not very accurate with respect to FICO 08 scores.  Of course, this simulator like most doesn't tell you what sort of model they are trying to use or mimic.