How to use a credit score simulator
February 23, 2023 6 min read
When it comes to credit scores, there are a lot of moving parts. Several factors—like payment history and credit utilization—are used to calculate credit scores, and some of these factors may impact your credit more than others.
So it’s hard to know how certain decisions—like opening a new account—might impact your credit. That’s where a credit score simulator can help. You could use one of these online tools to better understand the factors that influence your score.
But what exactly is a credit score simulator? And how does it work? Read on to learn the answers to these questions and find out how to use CreditWise from Capital One and its credit score simulator.
- Credit score simulators can help users estimate current or future credit scores.
- People have more than one credit score. These scores can vary by credit bureau, credit-scoring model and the information used to calculate them.
- CreditWise offers a free credit score simulator that lets you test how different financial actions might affect your VantageScore® 3.0 credit score.
What is a credit score simulator?
A credit score simulator is an online tool that could help you better understand the factors that influence your credit health.
Various companies offer credit score simulators, so each tool may function differently. For example, some credit score simulators work like online quizzes that ask questions about your current financial situation and spending habits.
Others might pull information from your actual credit profile to calculate score estimates. They may even let you test out different actions—like making a late payment or applying for a loan—to see how certain decisions could affect your future credit score.
How is a credit score calculated?
A credit score is a measure of a person’s creditworthiness—or how likely they are to pay back their debts—and it’s based on information found in their credit reports. Just like credit scores, you have more than one credit report.
There are three major credit bureaus that produce credit reports—Experian®, Equifax® and TransUnion®. The details in credit reports can vary from one bureau to the next. But reports typically include an individual’s personal information, credit accounts, public records and credit inquiries.
Factors that can impact credit scores
Several factors could affect your credit score, including:
A credit score simulator could help you see how changing some of these factors might affect your credit profile. Just keep in mind that credit simulators can’t tell you exactly how a decision will affect your score.
How to use the CreditWise Credit Score Simulator
CreditWise can help make it easier to manage your credit. It sends alerts when changes are made to your TransUnion and Experian credit reports, scans the dark web for your information and provides details about factors that might affect your credit.
The CreditWise Credit Score Simulator lets you test out financial decisions before you make them. This simulator uses information from your actual TransUnion credit report to make predictions. And the estimates are based on your VantageScore 3.0 credit score.
The Simulator is free to use—even if you aren’t a Capital One customer. It’s easy to sign up and start testing out financial decisions for free. And the CreditWise Simulator gathers your information with a soft inquiry, so using it won’t hurt your credit scores.
If you’re new to Capital One, you can download the CreditWise mobile app or sign up online. You’ll just need to answer a few questions to get started. Current customers can sign into their Capital One accounts to access the Simulator.
Simulate your credit score
The CreditWise Credit Score Simulator is located in the Improve section within the tool. Once you’re there, you’ll see your current VantageScore 3.0 credit score and your simulated score.
Simply select the action you want to test and the CreditWise Credit Score Simulator will estimate your future credit score. Some of the financial decisions you can test out include:
- Paying off credit card debt.
- Making on-time payments for six months, one year, 18 months or two years.
- Using available credit to make a purchase.
- Increasing the credit limit on a credit card.
- Opening or canceling a credit card.
- Borrowing money for a mortgage.
- Taking out a personal loan or auto loan.
- Allowing an account to become delinquent for 30, 60 or 90 days.
Other CreditWise features
The Credit Score Simulator isn’t the only thing worth checking out.
Check your current credit score
When you access CreditWise, you’ll see your current VantageScore 3.0 credit score displayed at the top of the homepage. The Simulator uses the following score range:
- Below average: 300-620
- Average: 621-700
- Good: 701-760
- Excellent: 761-850
Check your TransUnion credit report
Below your credit score, you can check your most recent TransUnion credit report. You can also view recent inquiries, the personal information you’ve shared with lenders and any court-provided public records.
You can also check your credit reports from all three major bureaus for free by visiting AnnualCreditReport.com.
Learn what’s affecting your credit
You can scroll below your credit report to view details about the factors that might affect your credit, including:
- On-time payments: Payment history can show lenders how likely you are to make on-time payments. It might include information from your credit accounts about on-time payments, items in collections, bankruptcies and more.
- Oldest credit line: This box represents the age of your oldest credit account. A longer credit history could have a positive effect on credit scores.
- Credit used: Your credit utilization ratio is the amount of available credit that you’re using. According to the Simulator, using between 11% and 30% of available credit is considered good credit utilization. Those who only use up to 10% of their available credit may have excellent credit utilization.
- Recent inquiries: Hard inquiries might stay on credit reports for up to two years. They can cause a slight dip in credit scores, so experts recommend only applying for credit when you need it.
- New accounts: This section could show you how recently opened accounts might affect your score.
- Available credit: Here you can find the amount of credit that you have available.
You can click on each section to see why it’s important, read credit-boosting tips and see how your credit factors compare to those of others.
See how to improve your credit score
You can also check out ways to boost your score under the Improve section. CreditWise pulls information from your actual credit profile to provide these personalized tips.
If you click on the Score change tab in the Activity section, you can see how certain changes may help, or hurt, your credit. And the History section shows you how your score has changed over time.
CreditWise sends updates when meaningful changes are made to your TransUnion and Experian credit reports. You’ll also get alerts if CreditWise finds your information on the dark web. If your information is compromised, you can open the alert and review some possible next steps under the Let’s take action! section.
The For you section is where you can find content and product recommendations tailored to your financial journey and credit profile.
Credit score simulators in a nutshell
A credit score simulator might help you understand how a simple action—like taking out a loan or paying down debt—can impact your score. Knowing how these factors affect your credit health could help you make informed financial decisions.
CreditWise has many features that can help take the guesswork out of managing your credit. And you can use the free Credit Score Simulator to test out financial decisions before you make them. It’s easy to sign up for CreditWise and using it won’t hurt your credit.
Looking for more credit-boosting tips? You can read about how to improve your credit score.