The Fico Score Simulator
I recently took a closer look at the so-called “Fico Score Simulator” offered up by Fico, founder of the all-knowing and all-powerful Fico score.
The tool essentially allows consumers to determine which actions will improve their credit score the most, instead of simply guessing.
You can gain access to the Fico Score Simulator if you purchase your credit report from the company, but they offer a sample to give us some insight.
Their sample went with a base 707 Fico score, which I consider “good credit” in my credit score range.
But suppose you needed that score to be higher to qualify for a mortgage or obtain auto loan financing.
Well, the Fico Score Simulator says your best course of action would be to pay down 90-100% of your credit card balances over the next 24 months to raise your credit score to between 757-777.
This action would help you in two ways – you’d have lower credit utilization and deeper credit history on the associated account(s).
But two years is a long time to wait for such an improvement. The simulation also said simply paying bills on time for one month would push your score to between 707-727, not bad for just doing what you should be doing.
Fico also noted that certain actions can sometimes help, but also hurt your credit score, including applying for a new credit card and executing a balance transfer.
The new credit card could land your credit score between 697-717, while the balance transfer would leave you somewhere between 692-722.
Finally, maxing out your credit cards could push your score as low as 637, while late payments on those accounts could drop you into the high 500 range.
Read more: How a Fico score is determined.
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