@mitchblue wrote:
@HiLine wrote:
@MoreRewards wrote:
What is rebucketting?I was planning to write a long post on this, but one other thread distracted me
In short, rebucketing happens when your credit profile reaches a certain level of maturity that the impact of certain credit scoring factors change.
For example, if your credit history is 2 years old, having 3/4 credit cards reporting positive balances may not suggest a high risk level, so your FICO score may be 750. But when your credit history reaches 5 years old, suddently 3/4 credit cards reporting positive balances indicate a high risk level, so your FICO score drops to below 700. So even if the credit profiles are the same otherwise, the second one may warrant a lower FICO score.
That makes no sense. I mean, no doubt what you said is probably accurate but I don't get it? So a longer history with everything still positive they just yank your score down? For no reason oher than a longer history?
No. Everything is based on probabilities and acturaral tables. Basically, you're now part of a new pool of people. Based on the new pool of people in your situation you're __% likely to get in trouble or have financial issues. It's like being in school. You may be an A student for classes in your major, but each new class, especially for classes not in your major, your chances for getting in "A" in your new class changes. During your time in each class, as you receive grades for papers, you're probability for getting an "A" increases or decreases.
So being in a new bucket is a new class and your % and probability to not get in financial difficulty will decrease as you continue to pay on time.
@bdhu2001 wrote:
@mitchblue wrote:
@HiLine wrote:
@MoreRewards wrote:
What is rebucketting?I was planning to write a long post on this, but one other thread distracted me
In short, rebucketing happens when your credit profile reaches a certain level of maturity that the impact of certain credit scoring factors change.
For example, if your credit history is 2 years old, having 3/4 credit cards reporting positive balances may not suggest a high risk level, so your FICO score may be 750. But when your credit history reaches 5 years old, suddently 3/4 credit cards reporting positive balances indicate a high risk level, so your FICO score drops to below 700. So even if the credit profiles are the same otherwise, the second one may warrant a lower FICO score.
That makes no sense. I mean, no doubt what you said is probably accurate but I don't get it? So a longer history with everything still positive they just yank your score down? For no reason oher than a longer history?
No. Everything is based on probabilities and acturaral tables. Basically, you're now part of a new pool of people. Based on the new pool of people in your situation you're __% likely to get in trouble or have financial issues. It's like being in school. You may be an A student for classes in your major, but each new class, especially for classes not in your major, your chances for getting in "A" in your new class changes. During your time in each class, as you receive grades for papers, you're probability for getting an "A" increases or decreases.
So being in a new bucket is a new class and your % and probability to not get in financial difficulty will decrease as you continue to pay on time.
Thanks. Will scores eventually go back up if things stay status quo?
Learn something new every day..
Nicely put, bdhu2001!
Mitchblue, in the same example, your maximum score potential with the more mature profile is higher. With 2 years of history, you may be able to get a 750, but with 5 years, you can get 800. Make sure you limit the negative factors to a minimum and you'll get there.
Mitchblue, in the same example, your maximum score potential with the more mature profile is higher. With 2 years of history, you may be able to get a 750, but with 5 years, you can get 800. Make sure you limit the negative factors to a minimum and you'll get there.
@mitchblue wrote:
@bdhu2001 wrote:
@mitchblue wrote:
@HiLine wrote:
@MoreRewards wrote:
What is rebucketting?I was planning to write a long post on this, but one other thread distracted me
In short, rebucketing happens when your credit profile reaches a certain level of maturity that the impact of certain credit scoring factors change.
For example, if your credit history is 2 years old, having 3/4 credit cards reporting positive balances may not suggest a high risk level, so your FICO score may be 750. But when your credit history reaches 5 years old, suddently 3/4 credit cards reporting positive balances indicate a high risk level, so your FICO score drops to below 700. So even if the credit profiles are the same otherwise, the second one may warrant a lower FICO score.
That makes no sense. I mean, no doubt what you said is probably accurate but I don't get it? So a longer history with everything still positive they just yank your score down? For no reason oher than a longer history?
No. Everything is based on probabilities and acturaral tables. Basically, you're now part of a new pool of people. Based on the new pool of people in your situation you're __% likely to get in trouble or have financial issues. It's like being in school. You may be an A student for classes in your major, but each new class, especially for classes not in your major, your chances for getting in "A" in your new class changes. During your time in each class, as you receive grades for papers, you're probability for getting an "A" increases or decreases.
So being in a new bucket is a new class and your % and probability to not get in financial difficulty will decrease as you continue to pay on time.
Thanks. Will scores eventually go back up if things stay status quo?
Learn something new every day..
Yep.