08-19-2012 05:21 AM
08-19-2012 04:32 PM
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.
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