General Credit Topics

[chevy22]

What is rebucketing?

[GoingTo800]

Peoples credit files are scored based on how people in similar situations as them rate I believe. I am wayyy over simplifing it, and basically as your score goes up or down you are put into a new bucket with a new algarithm to rate your report. Basically, a 30 day late hitting a credit report will not have the same results for every person. Some people may lose 40 points, others 100 based on their bucket they are in. Someone else with more time will probably chime in but my simple explination should help you understand it some

[llecs]

I'll add that the FICO formulas are complex. They added scoring buckets (about a dozen of them). Scoring buckets are a good thing. Everyone reading this is lumped into one scoring bucket and in turn are compared to everyone else within that bucket. This is good because someone with a new history isn't being scored the same as someone with a long history, or someone with a checkered past isn't compared directly to someone who has a pristine history. In other words, as the prev. poster pointed out, one person might lost 20 or 30 with a new late whereas someone with a perfect history might lost 60-70. You can only be in one bucket at a time and can only move out of the bucket if your report changes (e.g. losing a BK, or losing a last baddie, etc.). 

I like analogies. It's like in college. Ever have that professor grade on a scale? There might be a difficult test and everyone bombs with the highest score at 85%. If grading on a scale, the person with the 85% get's an "A" and everyone else follows in line. In terms of FICO, if the economy tanks then everyone will do bad, but the score is weighted around the best within each bucket.