Understanding "rebucketing"

[Anonymous]

Can someone please explain the concept of "rebucketing" and tell me if it's a legal tactic used by the bureaus?

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800FICOwannabe

06/01/09 - FICO scores: EQ - 637, TU - 641
05/04/09 - FICO scores: EQ - 660, TU - 647
04/21/09 - FICO scores: EQ - 711, TU - 642
09/09/08 - Mortgage Enhanced: EQ - 607, EX - 556, TU - 534

[llecs]

Rebucking isn't a legal tactic and the CRAs have nothing to do with whether or not you were rebucketed. Rebucketing comes from moving between scoring buckets (also called scorecards) and is a component of the FICO score.

FICO scoring is very complex. Your score is dependent on everyone else's score. The economy has peaks and valleys. When times are tough, FICO scores on average can certainly drop. To place things on an even playing field, people who have multiple lates, baddies, BKs, etc. are not compared directly to those with a pristine payment history. Likewise, people who have a short history aren't compared directly to those who have a long history. This is where buckets come into play.

FICO created multiple buckets (10? 12?) and assign you and me into one of many slots. As your history ages or your last baddie falls off, you are then reslotted into a new bucket. Regretfully when that happens, you become low man on the totem pole of sorts and usually would experience a small score drop. I experienced this when my last baddie impacting the score, a 90 day late, was removed from my CR due to CRTP. I knew the day is was going to be removed and pulled my FICO score the day before and the day after and this 7 yr 90 day late's removal dropped my EQ FICO by 17 points. Needless to say I was upset, but with time over the next few months, my score recovered and then some.

The best analogy I can think of is college. At some point in our education we had that one professor who graded on a scale. If everyone took the test and you got the highest grade at 80%, then you basically got an "A". Now this never worked for me because there was always that one nerd who spoiled it for the rest of us. But translated to scoring buckets, if the economy tanked and everyone did poorly, your score wouldn't suffer as much, relatively speaking.

[Anonymous]

Rebucketing huh...
You learn something new everyday.  Question/s?

Does rebucketing take into consideration all three of your scores? OR

Is each score rebucketed individually based on it's history? Also,

How often does rebucketing occur?  Lastly.

Is there a metrix/grid/range?

Any feedback would be great.  Thanks.

[haulingthescoreup]

Each credit report has its own credit score, and you could potentially be in three different buckets, if the info on your three reports differs greatly.

There are two negative score buckets: presence of a serious derogatory (90-day late or worse, charge-off, collection, or 60-day late less than two years old), and presence of a public judgment. (I'm oversimplifying.) If you have one collection or 37, you're in the serious derog bucket.

Other buckets seem mostly determined by the length of your credit history, whether overall or average age of accounts (AAoA.)

Then the speculation begins: there's probably one for "thin" files (not much credit reporting), short history (under 2 years oldest), and so forth.

Within each bucket, you can look great or, ummm, not. So you could have one 120-day late (serious derog bucket), but nothing else, and long history and low util, but your scores will still be respectable.

Or you could have no derogs, but insanely high util (80% or something), and your scores would be pretty awful, at least compared with those of others in your score bucket.

Or you could have a 10-month-old collection, and your scores will be much worse than someone with a 5 1/2 year old collection.

Many people complain about score buckets, but in fact, they give normal people a chance to look halfway decent compared to those who have always behaved themselves. Otherwise, we'd all be mired somewhere down around 420.