topic Re: bucket theory in Understanding FICO® Scoring

bucket theory

CreditDrama85 — Sat, 01 Aug 2009 00:53:18 GMT

i was wondering if anyone has seen their score INCREASE when a major derog like tax lien or judgment has hit their report. how much was the increase or did you score stay the same?

Re: bucket theory

smallfry — Sat, 01 Aug 2009 11:11:01 GMT

Sounds impossible.

Re: bucket theory

Anonymous — Sat, 01 Aug 2009 13:08:51 GMT

I cannot imagine how a public record would ever improve a score, EXCEPT to generate a score when no score was previously available.

So, in that case, you essentially went from zero (no score) to 400-500 range.

But other than that, how could it help? It won't improve age. It is derog. It doesn't help mix or utilization, payment history, etc.

Did you see a score increase? If so, please do tell, that I want to hear about?

Re: bucket theory

bobtail — Sun, 02 Aug 2009 13:27:51 GMT

On the flip side, a paid judgment is my only baddie left. If I have it vacated, will I get rebucketed and see a score decrease. Credit file thin only one TL open Orchard 320CL. Mortgage that was 120+ late, now is paid in full, and Master Card from 1992, closed and paid satisfactorily. Oldest account 18 years. Average account age is 7 years.

EQ 700

TU 711

EX fako 731

Message Edited by bobtail on 08-02-2009 06:27 AM

Re: bucket theory

smallfry — Sat, 01 Aug 2009 14:28:26 GMT

Clean reports trump scores anyday.

Re: bucket theory

CreditDrama85 — Sun, 02 Aug 2009 05:37:25 GMT

this is a good example, bobtail has a paid judgment and a 700 fico. if the judgment is vacated the fico score probably will go down if the bucket theory is true.

Re: bucket theory

bobtail — Sun, 02 Aug 2009 13:44:07 GMT

Opinions? I need to purchase a car. Should I use current report with 700 score and paid (2004) judgment or have judgment vacated with unknown score. Judgment is $765, and Pro SE case, they will not contest.

EQ 700

TU 711

EX fako 731- no baddies reported ( judgment not on EX)

Re: bucket theory

smallfry — Sun, 02 Aug 2009 14:11:32 GMT

@bobtail wrote:
Opinions? I need to purchase a car. Should I use current report with 700 score and paid (2004) judgment or have judgment vacated with unknown score. Judgment is $765, and Pro SE case, they will not contest.

EQ 700
TU 711
EX fako 731- no baddies reported ( judgment not on EX)

As long as the TL being dropped doesn't decrease your AAofA your scores should go up. Have you run all the Estimators and Simulators? For a car loan I would go ahead and just have it deleted if that is what you are talking about. Are you talking full deletion here?

Re: bucket theory

CreditDrama85 — Sun, 02 Aug 2009 14:59:45 GMT

the amount doesnt matter. IMO i think you should get it vacated after the purchase. i think your score will drop once it is vacated.

please let us know though. good luck!

Re: bucket theory

Anonymous — Sun, 02 Aug 2009 15:10:15 GMT

Unless you have other derogs on your file, I predict your score would increase if you have the judgement removed from CR.

Regardless, even if your score dropped 5 to 15 points, a 685 to 695 with NO derogs is a better score than 700 with a major derog.

An auto loan won't be like a CC. It will be reviewed. There will be income verification. And a clean report is better. The derog does nothing to help your application....nothing, nothing, nothing.

It does not ad age. It doesn't help uti. It doesn't help mix. It doesn't help pay history (opposite in fact).

Have it removed. If you score moves down, it will be minimal, harmless and recover rather quickly.

EXAMPLE: My daughter had only 3 TL's (all AU accounts). Her FICO was in the 780's. Thin file. She is only 21 years old. The AU's were 3 years, 3 years and new....her AAoA was only 2 years.

Don't let FICO alone be your deciding factor. Clean reports and corresponding scores are better. Now if this was an old account with 30 day late in 2004, then I would say leave it alone....it's helping your AAoA. But not so here.

My opinion, though. Nobody can guarantee anything.

USE THE FICO ESTIMATOR LINK IN MY SIG LINE TO RUN YOUR OWN SIMULATIONS.

Message Edited by txjohn on 08-02-2009 08:10 AM

Re: bucket theory

bobtail — Sun, 02 Aug 2009 16:05:58 GMT

Yes, full deletion. Used simulator for 18,000 car loan scores drop 660 -690. Only other baddie is a mtg from 2004, with 120 day late that was paid in full in 2005. Tried to GW for deletion, but no luck.

Oldest account is master card from 1991, closed, paid as agreed satisfactorily. Can't reopen MC, from credit union where I am no longer employed. Average age of accounts 7yrs.

Credit file thin. Only one Orchard Card 320CL opened in 3/09.

First should I vacate judgment

apply for credit card or car loan.

Currently driving 1998 Windstar with 207,000

Worked so hard to improve credit file, I don't want to see scores fall. Now I am at the point where I'm afraid to apply for anything.

Suggestions greatly appreciated!

Re: bucket theory

CreditDrama85 — Sun, 02 Aug 2009 16:37:12 GMT

if i were you i would

1. get auto loan

2. get judgment vacated and make sure the CBs pick up the deletion

3. apply for 1 -3 credit cards with good cl

Re: bucket theory

Anonymous — Sun, 02 Aug 2009 16:43:29 GMT

LOL. Not trying to be argumentative, but I would:

1. vacate

2. auto loan

3. cc's

Derogs are exponential when you have multiples. The fact that you have other derogs means you won't be rebucketed most likely, which means your score should not go down, but up.

Multiple derogs are flags to lenders.

You don't need as high a FICO to get an auto loan as you do for a CC. You don't need as high a FICO for home loan as an auto.

Home Loan wants mid score 620 (most important is DTI and derogs)

Auto Loan wants 620 plus (depends on lender and the rate you want)

CC's want higher FICOS for the most part and income

The trend I am trying to show is that IF your FICO goes down (which I bet it won't since your CR is not clean even with vacate, meaning no rebucket is likely), it will improve the "quality" of your CR as a whole and still be well within FICO range of auto loans.

Again, this is all opinion.

I recommend you run multiple FICO Estimations to see the results both WITH and WITHOUT a public record (judgment) but including your other LATES, etc. and see what it says your score might do.

Re: bucket theory

smallfry — Sun, 02 Aug 2009 17:05:46 GMT

@Anonymous wrote:
LOL. Not trying to be argumentative, but I would:

1. vacate
2. auto loan
3. cc's

Derogs are exponential when you have multiples. The fact that you have other derogs means you won't be rebucketed most likely, which means your score should not go down, but up.

Multiple derogs are flags to lenders.

You don't need as high a FICO to get an auto loan as you do for a CC. You don't need as high a FICO for home loan as an auto.

Home Loan wants mid score 620 (most important is DTI and derogs)
Auto Loan wants 620 plus (depends on lender and the rate you want)
CC's want higher FICOS for the most part and income

The trend I am trying to show is that IF your FICO goes down (which I bet it won't since your CR is not clean even with vacate, meaning no rebucket is likely), it will improve the "quality" of your CR as a whole and still be well within FICO range of auto loans.

Again, this is all opinion.

I recommend you run multiple FICO Estimations to see the results both WITH and WITHOUT a public record (judgment) but including your other LATES, etc. and see what it says your score might do.

+ 1. Get the report clean. Your scores then have a higher ceiling.

Re: bucket theory

bobtail — Sun, 02 Aug 2009 17:11:10 GMT

txjohn,

I ran several different simulations. Without judgment and car loan, with judgment and car loan. With the one 120 baddie I have, without it, along with no judgment and car loan, with judgment and car loan. No baddies and car loan. EVERY simulation came back 670 - 720!

With results all the same, it probably would better serve me to vacate the judgment. Wait for car loan to age and then apply for prime credit card.

If simulation was different, I would have been afraid to vacate before car loan. The car is a necessity, not a want.

Thank you, I will keep you informed!

Re: bucket theory

Anonymous — Sun, 02 Aug 2009 18:07:09 GMT

Do keep us posted, since CreditDrama and I got a sorta bet going (LOL just joking).

Good luck and in the famous words of Elmer Fudd: "SSHHHH! I'm hunting judgements. Ki-wo the judgement!"

Re: bucket theory

CreditDrama85 — Sun, 02 Aug 2009 20:58:34 GMT

hahaha yes keep us posted. you are doing the right thing because a cleaner report is always better but i am predicting a drop initially.

Re: bucket theory

cobaltnv — Sun, 02 Aug 2009 22:11:17 GMT

CreditDrama,
I am curious as to why you predict a drop in score? The OP has other derogs so will remain in a "dirty" bucket. So it is unclear to me how/why any score drop could occur?

Re: bucket theory

CreditDrama85 — Sun, 02 Aug 2009 22:51:37 GMT

the OP has a 120 day late and a public record right now. when the public record is removed they will have the

120 day late and no public record so i think the drop is going to come from fico scoring the 120 late based on/compared to other files with no public record....(which would make the 120 late serious).

right now the 120 late looks minor compared to a public record that has been satisfied and had a chance to age.

i predict a score drop of up to 30 points.

Re: bucket theory

Anonymous — Sun, 02 Aug 2009 23:28:11 GMT

Final call for all bets....place your bets:

Current line up:

CreditDrama - bets drop 30 points

txjohn - bets neutral to 15 point gain

LOL. Any more bets?

Nothing like a little spirited bet!