FICO^® Score Simulator from MyCredit Guide: How It Works

Your credit score is an important number that plays a part of your daily life, from where you might live, which car you might drive, and what credit cards you may have in your wallet.¹ That’s why it’s important to know your score. Credit scores are updated every time they are requested,¹ so timely repayments and lower debt can lead to a higher score within a few months.²

If you’re serious about improving your credit score—or making sure it doesn’t drop—it can be smart to come up with a strategy and assess “what if” scenarios. That’s where a credit score simulator calculator comes in: This tool helps simulate your credit score based on various financial actions you may take (such as debt repayment or opening new credit) that may affect your score.

With American Express^® MyCredit Guide, once you’ve enrolled, you can log in to check your FICO^® Score, explore your Experian^® credit report, and take advantage of tools like the FICO^® Score Planner and FICO^® Score Simulator. Plus, it’s all free, even if you’re not an American Express Card Member.

A credit score simulator shows how various financial actions may affect your current credit score. Because it’s a simulation, actual results may vary, but you can use it to see what actions could impact your credit score.

For example, if you are planning on opening a new credit card or applying for a loan, you can use the simulator to understand how your application may affect your current score.

If your current credit score isn’t earning the approvals you need for new lines of credit or loans, the simulator can help you see how various credit actions you take could drive your score higher.

In short, the credit score simulator answers your “what ifs” and provides potential outcomes for various scenarios.

Your FICO^® credit score is calculated by assessing various factors in the five predictive categories of your credit history:

1. Payment history: Highly influential
   A strong credit history of on-time debt payments can help your credit score.³ Conversely, when debts are defaulted on or settled, your credit score will likely go down.⁴ Late payments of 30 days or more also are seen as negative factors on your credit report.³ To keep this category in good standing, consider automating your monthly minimum payments to ensure you aren’t affected by any late payments.
   
   
2. Amounts owed: Highly influential
   Sometimes referred to as your credit utilization ratio, total credit usage looks at your current balances (what you owe) and your current credit limits (how much your credit companies and lenders allow you to borrow).³ The lower the percentage of your available revolving credit being used, the better for your scores. Individuals with the highest credit scores tend to keep their credit utilization rates below about 10%.³ To help maintain a healthy credit score, you can pay down debt, limit new expenses, and request increases to your current credit limits.
   
   
3. Length of credit history: Important, but less influential
   Looking at the average age of your credit accounts helps lenders understand how long you have been able to manage credit in a healthy way.³ The longer you keep your accounts in good standing, the better.
   
   
4. Credit mix: Important, but less influential
   A mix of different types of credit can have a positive impact on your credit score.³ Types of credit considered in reports include installment debts, like student loans, mortgages, or car loans, and revolving accounts, like credit cards and other lines of credit.³
   
   
5. New credit: Important, but less influential
   When you apply for a new loan or a new line of credit, you are signaling to lenders a greater need for credit.³ While one application isn’t likely to do much harm, a series of applications may indicate an overreliance on credit.⁵

A credit score simulator can’t directly improve your score, but it can help you explore how different financial decisions could change your score. You may be wondering whether it would be better for your credit score to trigger a balance transfer, to apply for a credit limit increase, or to apply for a personal loan to help pay off debts.

A credit score simulator can help you see the potential impacts of these different options, allowing you to weigh different scenarios and choose which credit option works best for your circumstances—and your credit score.

Here’s why it’s smart to aim high when it comes to your credit score: Having a healthy score could help you to gain access to certain types of credit—including certain loans and the best credit card offers and rewards.¹

With responsible credit card use, these programs can help you access travel opportunities, cash back rewards, and more.