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Question By
altcheckmate

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Credit score simulator is completely worthless!
I was sitting on the very top of the "Fair" category, with 42% credit utilization. the score simulator said if I lowered my utilization to 29% or less, I'd jump up to the low end of "Excellent" at 753, so I paid off over $2000 of credit card balences, lowering my utilization to 23%. Guess what happened? My score actually DROPPED 6 points! Nothing else had changed. Never a missed or late payment, Nothing derogatory, no new inquiries, no new debt. A Credit Karma "customer service" rep told me she didn't know why, and to ask the community. Again, the ONLY thing that changed on my last score report, was my utilization rate dropping dramatically. Why even have the simulator if it isn't even close to working? It used to work, and it worked well, so what's going on? Credit Karma is becoming a joke compared to the way it used to work. They're supposed to know all about this stuff, and they can't even give me an explanation other than "ask the community".

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Well the simulator aside, there had to be other changes or the amount of usage did not drop you to the next lower threshhold.  Decreasing untilazation will inprove your score, mine going from about 20% down to less than 1% raised my scorefrom 740 to the 820s I have now.

Since you only had to pay off 2k to drop 20% I would say there are other items holding you back in the Vantage scoring model.  Such as not enough lines of credit, not diversivied enough, or average age of credit and that is effecting your score more than the utalization.

Remember that the simulator ONLY looks at one asspect of your credit history and bases a guess on what it should do based on that one factor alone.  But at the end of the day, paying off and having lower utalization does look better for all scoring models, as well as prevents you from paying extra interest to the big banks that do not need your money as badly as you need your money.  So be proud that you cut your debt in half, and work to do it again, while working on the other aspects of your credit file, therby helping to imrpove your score across all scoring models for any lenders to see.

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Reply by
Nomadre

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oh and the big jump comes from under 10% untilization from what I have read.

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The simulator is not your problem here, it is the Vantage Scoring system. Many people have been reporting the same issues, paying down their debts with nothing else changing and being penalized by the scoring system used here for doing so. I tell them to go check their FICO scores somewhere, some have reported back and said that all was fine and good with FICO as it should be for paying down debt. Most lenders use FICO scores, so really the scores that you get here are basically worthless in the real world, so stop worrying over them. You did do the right thing, the simulator really wasn't wrong, though most times it is and I would never trust it, nor would I ever try to appease the Vantage system. Only worry about FICO and yes things seem to be going down hill rapidly here.

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