When our scores are figured the FICO algorithm uses statistics to evaluate our probability of default against others in similar circumstances as determined by the information on our credit reports. People in similar circumstances are defined as one bucket.
I don't think that the details of the specific buckets being used are publicized. One major factor for bucketing is the existence or not of a "serious derogatory" on your report which is defined as a 60 day late within the last 2 years. If you have the serious derog within 2 years then you are scored by comparing your data against others with the same bucket. It's possible if you are in the serious derog bucket and are working to repair your issues that when the serious derog comes off or is downgraded that you may score better in the old bucket than you do at first in the new bucket.
Other bucketing factors are the existance of a mortgage, installment loan, bankruptcy, number of open credit lines and length of credit history.
Keep in mind that you would have been at or near a ceiling in the old bucket and you will be as low as you can go in the new bucket, assuming that you are taking positive steps to improve your status. With continued effort you can expect to progress upward through the scoring range in the new bucket and will likely eventually move on to another bucket.
