How does the simulator work? The numbers don't make sense to me!

[Anonymous]

My current score is a 609.  The similator says that if I pay my accounts on time, my score will be 649-689.   It doesn't matter whether it is 1, 3 or six mi=onths in the future.  My last late pay was 23 months ago.   The only thing that makes sense to me is perhaps a two year anniversity might make a difference.

However, if I say I will pay one payment late, it simulates my score as 574-609, so there seems to be no impact of a late pay.  This really doesn't make any sense at all to me.

[Junejer]

Hello AHB, and welcome to the forums. Please read Credit Scoring 101, if you haven't already.

The simulator is not an exact science. It's just gives a range to be safe. A late will definitely have an impact on your score. Shoot for the middle of the range to be safe.

[haulingthescoreup]

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AHeavyBalloon wrote:

My current score is a 609.  The similator says that if I pay my accounts on time, my score will be 649-689.   It doesn't matter whether it is 1, 3 or six mi=onths in the future.  My last late pay was 23 months ago.   The only thing that makes sense to me is perhaps a two year anniversity might make a difference.

However, if I say I will pay one payment late, it simulates my score as 574-609, so there seems to be no impact of a late pay.  This really doesn't make any sense at all to me.

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Since you don't have any lates "younger" than this one, that's exactly what that means. It will be one month before that late goes 2 years old, and whatever other real or perceived weaknesses you might have, that new-ish late is the more important for driving your scores.

So once that late has its second birthday, the sim is saying that you might well hit 669 (the middle figure in the 649 - 689 range.) Only you'll be able to tell us if this is true, but it might very well be.

The damage done by negatives is pretty much driven by how recently it occurred, and then how severe it was (30 day vs 90 day, for instance), and then by whether it was a lone example or whether you have lates peppered all over your charts.

[Anonymous]

Hmmm,,there might be another 'late' that I haven't been paying.  Could the simulator be looking at that current status, and expecting it to change with me making timely payments?  (Hope you understand what I mean to say, there seems to be contradictory information in the record.

Does anyone know how the simulator would treat something like this?

The entry looks very strange to me.  It seems more appropriate for a collection.

The info is

Status as of Dec 2008

Date Opened Not Reported

Date of last activity sept 2004.

Date closd not reported

Largest past balance $116

Terms not reported

Account type Open Account

Account holder Individual

Scheduled payment amount 0

Descriptions collection account

Balance $116

Current Status120+ past due\

Past Due amount $116

Seven year payment history

30days late 0 times, ditto for 60 and 90+ days late

Worst delinquency None reported

[Anonymous]

Here is my situation.

My score is 609.

I have six months to find about $25,000 in order to pay off a mortgage balloon.  (There is no reset option. So while improving my credit long term might be nice, Keeping my score from short term, negative impacts is CRITICAL.

I had a lender do a hard pull on my score on 1/8/09 (And I am sorry I didn't look here first.   And this loan is definitely not attractive to me.)

If my score is almost certainly going to improve by 40 points, then I think I should wait a month before applying elsewhere.

If I wait, and my score doesn't improve, now my score is impacted by that pull.

Once, I used a simulator elsewhere, and it told me something that didn't make sense for my situation.  I doon't remember what.) When I asked about it, I was told that "on the average"  it is helpful.

So if the simulator is just based on generalities, I don't want to rely on its recommendations as a  guide to my actions.  But if the simulator is "the real deal."  then I feel better about relying on it.

Thanks,

AHB

[Anonymous]

Hauling the Score Up,

I am not sure what you are saying:

It sounds like you are saying that 24 months without a late pay IS some sort of threshhold.

But maybe you are looking at the simulator's behavior, and saying yes that seems to be why it acts that way.

And of course, there is the other explanation, maybe that 120+ late is driving my score down. and it is expecting that to go to a current status.

[mymoneynow]

The simulator has not been accurate in many situations, you can search simulator and read lots of discussion here. There are ranges noted instead of exact point calculations because fico scores are very complex. They do not publish the formula. So the best we can do is use the simulator to get an estimated range. I usually just take the bottom of the range and add just a few points to make an educated guess on my changes. They have been sometimes very close, sometimes, no where close.

You can go over to the Rebuilding your Credit forum and post your situation along with your entire CR, leaving off personal info of course. You will get several suggestions to help you increase scores quickly. Then you would be able to get a better rate on mortgage. Also, the Mortgage forum is a great place to read and search ideas.

Since you have a little time, it would be well worth your time to try to increase score as much as possible before your balloon is due. You will be amazed at what can be accomplished in just 2 or 3 months!

Good Luck!  

[Anonymous]

So I take the simulator with a grain of salt, and not rely on my score going up.  I apply for loans now.  I can still work on my score.  Besides Bank of America said it will take two months to close, so if my score goes up, maybe I can show them the new score, and get a better rate.

I don't know if the simulator is accurate, but I DO know that that hard pull will be coming up.   And I am motivated right now.  In two months, I might be feeling hopeless again.

AHB

[mymoneynow]

I totally disagree, Do not app for new loans yet, improve scores first! Loan officers are not interested in what you plan to do to help your score, they want to see the improved score when they pull your reports.

I raised my scores 40 points in 1 month by just having inaccurate info deleted.

My DH saw a jump of 55 points in 1 month, just by deleting inaccurate info, and sending GW letters for late payments. 

There are so many knowledgeable members here, especially the mods, that could really help you improve your score before you app. It just takes some work and patience. If you just work on it for 2 months, you could really see a major difference in your scores. Remember, the higher your score, the lower your interest rate.

[Anonymous]

My score has already been pulled by HFC, my current lender.  So there will be another recent inquiry on my score.  I read something about a 14 day window. 

Also, I am much more concerned about closing costs, and being approved, tham I am about inteest rates.  My mortgage is less than 25K, but a balloon is coming due in six months.

I have been shoveling all the money that I can into the loan, hoping to somehow pay it off.   So I think I want to continue to try to pay it down, trying to pay it off early.  Making the payments is not a problem at all.

I saw a loan at Bank of America that I liked, and I would feel comfortable with.  Zero closing costs, a prepayment penalty for 24 months (which is only fair, because it costs them money to issue the loan.

The loan proposal from  HSBC is so unappealing to me that I would prefer to strip my house, and sell my doorknobs, to find the money to pay off my balloon.  (Please note, I know that some people in foreclosure are gutting their houses because they are being foreclosed on.  What I am saying is I would do this to PAY OFF THE LOAN.  Those doorknobs are already 80 % mine! )