Buckets

[John060675]

OK, can some please explain to me what the he** buckets are?  I have read the term multiple times on this forum, but I cannot find a definition of them.

People losing points and gaining points through changes in buckets.  What?  So tell me which bucket I need to choose to get point!

I appreciate the help,

[haulingthescoreup]

It's kind of like an elementary school, but with a really strange way of assigning you to a grade (2nd grade, 3rd grade, etc.) Say you've been in 2nd grade for a while, and you're doing really well, in fact you're up near the top of the class. Your teacher decides that 2nd grade is not really the appropriate place for you to be any more --you don't really compare with your classmates, and it's hard to evaluate you, and there really isn't any room left for you to advance. So one morning you come in, and surprise! --your desk is now in 3rd grade. It's a scramble at first, because they're already doing cursive and long division, and you're still struggling with your times-seven's. But if you stick it out long enough, you catch on and catch up, and your grades in your new class go up.

This is the way I think of it, and I'm a little unhappy with my promotion, because I would have liked to have gotten some gold stars on my 2nd grade chart. I wouldn't be as bothered if someone would bother to explain the rules of third grade, which so far my teacher (mean old Mrs. Fico) won't do. So I've pretty much decided to figure out the rules for myself and blunder on as best as I can.

Here's fused's explanation --page 2, msg 17. My advice is to pour yourself a stiff one first:

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&message.id=10075

[haulingthescoreup]

BTW, there's a LOT of flaws with my analogy. One is that the promotion to a new bucket actually seems to occur because you move into a different category of borrower, like now you've had credit for 2 - 5 years (the example they give.) In my case, I think it's either because our re-fi mortgage turned 5 years old, or because my total CL went over $100K, if you count the HELOC. There just hasn't been anything else going on in my otherwise dull credit life.

So you don't get re-bucketed because of your scores. It happens because you move into a new credit peer group, whether because of the types of credit you have, or length of credit, or maybe credit limits. And if you can find a way to get another point, give me a holler! My poor EQ score is stuck in reverse big time.

And this is all theorizing on my part, based on what I've read on these boards and the dribbles of info that FICO gives. Someone please come rescue me from analogy h*ll!

[Anonymous]

HTSU, great analogy.  It makes sense and gives a good picture of how it works.  Basically, you jump into different pools, buckets, etc. (there are different names out there) over periods of time in your credit "life".  One bucket might be people that have recently filed for a BK and are rebuilding their credit...  So John Doe filed for a BK 3 years ago, and is rebuilding his credit with high APR/AF CCs and has a score of 680...  Now down the road, 7 years or so, that BK falls off...  Now his credit score might drop because he'll move out of that BK bucket and into a higher bucket.  Definitely not the easiest thing to explain, but you do get compared to other people with similar credit histories.

It's all a game...  And over time, if you do the right things you'll eventually win.

[John060675]

OK, let me see if I understand this totally.  Lets say you pay everything on time, do really well for 5 or 10 years, so they reward you with putting you into another bucket that compares you with "better" credit people.  There reward is to lower your FICO scores when they move you up.

Now, lets say you are doing bad, and they put you into a lower bucket to be compared with "bad" credit people.  Your punishment, they boost your FICO score up.

I feel like I am living in Bizzaro world.

I am starting to think that the more I learn about the ways of the FICO, the less I really want to know. 

[Anonymous]

Well, if you're doing bad, your score is going to be bad...  But it's a little easier to raise a lower score than it is with a score that is higher.

I try not to think of the bucket theory.  Pay on time, keep utilization under 10%, and don't apply for credit you don't need.  If you do that, you really don't have to worry about your score too much.  Sure it'll go up and down, but it'll still be good. 

[Anonymous]

Exactly John. The only thing you can be sure of is that you cannot be sure of anything. And that's for sure.

Can we say Catch-22? I've found a bottle of wine helps. Doesn't help you to understand more, but makes it easier to laugh at this insanity.

[John060675]

I understand what you are saying, but here is the problem I am having with it.  I have worked my a** off to get my credit back to where it should be.  I am planning on buying a house within a year, so I check my credit reguarly.  My TU score went down 4 points without anything else changing.  I would have to assume this is the "bucket" things.

Well, this 4 points being lowered (if at closing time) can cost me thousands of dollars over the life of the loan, since I would not be able to get quiet as good of a rate.  This is why I worry about it.

[Anonymous]

I wouldn't worry about it...  Your score changes.  If you're utilization is under 10% on your CCs, you have a good payment history (and maintain it), and don't apply for credit when you don't need it, you'll be fine.  And when your lender reviews your credit report, they're not just looking at your score, they're looking at your entire credit history. 

You never know, you score may go up tomorrow...  If you're doing everything you can, then you're fine.

[Anonymous]

I understand John. And I do not mean to make light of the situation at all. I apologize if I offended you in any way.

That was my way of saying, as you stated, the more I try to understand, the more I understand how little I know, and it's a little frustrating, and mind boggling.

I find I'm powerless to do anything, except to keep utils very, very low, and work on the lates. While striving to raise cl's. And hope for the best.

Good luck to you.