Puzzling advice from FICO simulator. Any thoughts?

[ztnjpv]

Hi. I just ran the "best course of action" function in the FICO simulator and it makes no sense. Here's what I got:

Best Action - Pay Down 90%-100% of Your Credit Card Balances - Over the Next 24 Months

By doing the above action, the simulator claims my TU FICO should rise from a current 699 to a potential 719-759.

That's all fine and good except that I have a total balance on my report of $53...and that's from a card with a $9700 limit. I am actully an authorize user that account. It belongs to my wife (very strong credit score) who rarely carries a balance at all on that card. The 2 cards that are actually in my name have limits of $1,000 and $1500 and have yet to ever show on balance on credit report because I pay them off before the statement date so they always report as ZERO BALANCE.

So, we have a total limit of $12,200 on my reports with a current balance of $53. The advice makes no sense to me. OTOH, I do have 2 timely-paid installment loans. One is a 3 year loan that orginated in 2/11 with a balance 30,300 and is now at about 21,000. The other is also a 3 year that just started in 11/11 at 11,500 and is now at 10,700. But those are loans...not cards. 

What I am actually really considering doing is adding another card (a sky miles card...maybe the Venture Card). I can now confiently apply for a better card and I should be able to get a better limit. Non-FICO simulators (like CreditXpert) show a possible positive bump of 9-11 points on TU, about 3 points on EX and about 6 on EQ. The FICO simulator just says my score could end up between 689-719. Not very helpful! But CreditKarma's simulator suggests a bump of 8 points for this same action on my TU TransRisk score. So, the odds are that my FICO effect should be positive. 

But again, any ideas on why the SICO simulator gave such seemingly useless advice about paying off non-existent balances?

[RobertEG]

It scours down through items affecting credit.

If it found no derogs, etc., it probably just picked the only category where improvement could be garnered.  With SOME balance reported, I suspect that it just said "reduce % util."

It had to say something!  Simulator comments must be taken in context.  The analysis is kept broad for reverse engineering concerns, and will rarely be specific.

I would take it for what it is worth......

As for building your own revolving credit, I for one think it is a good idea.  Inflating your score based on AU status might give you better numbers, but one never knows how much a potential creditor will discount the importance of a FICO score that is obviously inflated due to reliance on the account history of another.

[ztnjpv]

Thanks for the reply Robert. 

Yeah....I kinda figured the system couldn't come up with something useful so it spit out something generic in hopes that it would seem relevant (like Astrology) but, alas, it fell flat with a big thud. 

OTOH, you would think the simulator would at least say SOMETHING that would make sense for me. After all, if expanding my available credit is the best bump available, it should just say so. 

[llecs]

OP, look beyond the balance and util. The 24 months is indicative of time. In 2 years, assuming nothing else is added, your oldest overall, your oldest revolving, your oldest installment if you have one, and your AAoA turn 2 years older. Any of these would likely increase your FICO.

[ztnjpv]

llecs,

true. That's a more abstract idea that crossed my mind. I confess that I just assumed the simulator wasn't going to be that sophisticated. 

[RobertEG]

I am not so sure that the real intent of the comments is to provide guidance to consumers on a best future plan.

I suspect they are more for the benefit of creditors should they decide to deny credit, thus providing them with identification of something negative to say to support their denial.

At least that is how I view their real purpose.

[Cdnewmanpac]

The simulator is not sophisticated. It runs through all the individual options available to you through the simulator (pay down debt, open new account, close account, pay on time, etc.) and then reports the one with the biggest bump. You could do the same thing by doing each option and comparing. The answer will almost always be "pay on time for 24 months" (if you have a zero balance at time of simulation) or " pay down debt over 24 months" if you have any balance at all (I got that advice with an 18 AF as my only balance). Even though most on this board say you can maximize your score by posting a balance of 1-9% of total available credit, the simulator clearly favors a zero balance for all revolving debt. If you pay to zero and wait until that posts to your equifax report, then rerun the simulator, it will now suggest "pay on time for 24 months" as the best action.

[BGinVA]

I got the same thing on mine, if you read below the bold print it actually explains that in 24 months you will have a longer aaoa and a longer clean payment record, so it is considering the ageing with an assumption of a stellar payment record over those 24 months as well. 

[Anonymous]

@I just ran the "Best Action" on my TU report and I get the same message even tho I'm @ 1% util ($128 revolving debt on one CC to 55K avail credit) it says my TU FICO could be between 809-849 if I pay down 90%-100% of your credit card balances over the next 24 months.

As llecs has said, read below......

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@llecs wrote:

OP, look beyond the balance and util. The 24 months is indicative of time. In 2 years, assuming nothing else is added, your oldest overall, your oldest revolving, your oldest installment if you have one, and your AAoA turn 2 years older. Any of these would likely increase your FICO.

---

 I believe FICO is just looking at a 24 month period of perfect payment history, AAoA's becoming 2 years older, your oldest account turning 2 years older etc.... based on the info in your report at the precise moment you run the simulator, again as llecs has said, as long as you add no new accounts or nothing becomes negative on your report, the simulator is basing it's calculations on the current info in your report and calculating what the "potential" score could be in the next 24 months.

[CS800]

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@Anonymous wrote:

@I just ran the "Best Action" on my TU report and I get the same message even tho I'm @ 1% util ($128 revolving debt on one CC to 55K avail credit) it says my TU FICO could be between 809-849 if I pay down 90%-100% of your credit card balances over the next 24 months.

As llecs has said, read below......

---

@llecs wrote:

OP, look beyond the balance and util. The 24 months is indicative of time. In 2 years, assuming nothing else is added, your oldest overall, your oldest revolving, your oldest installment if you have one, and your AAoA turn 2 years older. Any of these would likely increase your FICO.

---

 I believe FICO is just looking at a 24 month period of perfect payment history, AAoA's becoming 2 years older, your oldest account turning 2 years older etc.... based on the info in your report at the precise moment you run the simulator, again as llecs has said, as long as you add no new accounts or nothing becomes negative on your report, the simulator is basing it's calculations on the current info in your report and calculating what the "potential" score could be in the next 24 months.

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+1

On my EQ my util was 2% and i used the best scenario and it said my score would be 719-739 if i paid off my balance n 24 months.