Anyone here willing to explain (in detail) "bucketing" and/or "rebucketing"?!?

[I_SUFFER_FROM_FICO_ENVY]

I've been reading as much as I can get a hold of.  A simple google search only links to forums here and elsewhere.

So, let me see if I have this correct:

1)  If you have collections, charge-offs, public records, bankruptcies, you are BUCKETED with other people in a similar boat (or BUCKET), is that correct?  Your score is compared and calculated to others in your same credit report?

2)  When things change (e.g., a charge off falling off your report after 7 years) it is possible (and highly probable) that your FICO score will change (up or down) b/c FICO has "REBUCKETED" you in another boat (or bucket)?  Now, you are being compared to others in another boat (bucket)?  Correct?

So, my main question is who gets bucketed?  When would that occur?  Why does such a thing even exist?  Would you get rebucketed for missed payments falling off after 7 years?  Would you get rebucketed for missed payments that are 5 years old compared to 3 months old?  Where are the dividing lines?  Anyone here know?

Thanks.

[guiness56]

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@I_SUFFER_FROM_FICO_ENVY wrote:

I've been reading as much as I can get a hold of.  A simple google search only links to forums here and elsewhere.

So, let me see if I have this correct:

1)  If you have collections, charge-offs, public records, bankruptcies, you are BUCKETED with other people in a similar boat (or BUCKET), is that correct?  Your score is compared and calculated to others in your same credit report?

2)  When things change (e.g., a charge off falling off your report after 7 years) it is possible (and highly probable) that your FICO score will change (up or down) b/c FICO has "REBUCKETED" you in another boat (or bucket)?  Now, you are being compared to others in another boat (bucket)?  Correct?

So, my main question is who gets bucketed?  When would that occur?  Why does such a thing even exist?  Would you get rebucketed for missed payments falling off after 7 years?  Would you get rebucketed for missed payments that are 5 years old compared to 3 months old?  Where are the dividing lines?  Anyone here know?

Thanks.

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You won't get rebucketed if only one out of a number of major derogatories come off.  Generally, they all need to be gone.  Here is a thread that will help explain better.  Particularly the last post on the first page:  http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Re-bucketing/td-p/1434216

[RobertEG]

What is generally referred to on this site as "rebucketing" is an overall categorization of each FICO scoring category based on general data prior to calculating the score for each category.

As you correctly state, the scoring algorithms take the view that consumers should be compared to others with the same general characteristics in a category.

Why that is so is because the brother Isaac has determined, from experience, that this gives better predictive results.

While payment history is the most oftern focus, other categories also have their own categorizations.  For example:

Payment history has general catefories of what I call "clean" and "dirty" payment history.  Dirty means the presence of any major derogs, being any delinquency of 90+, a charge-off, collection, public record, etc.

Removing one major derog when others still are in the CR keeps the file "dirty."  Thus, score improvment is not as significant when one is removed.

Once the file becomes "clean," different scoring criteria are used for the category.

Length of credit history has categories based on age of accounts, both oldest and average.

Mix/types of credit can cateforize the file as thin or thick.  A thin file is generally one with less than 3 trade lines, and since limited history is presented, FICO scores with some pessimism as to its predictive value.  It likes to see multimple revolving as a showing of how the consumer has used discretionary credit limits.

How the categorization or bucketing of each category is used to alter scoring is not something you will find in any published literature, as that remains trade secret information proprietary to Fair Isaac..  We use reported experiences of others posted on the site to get a feel, but since each credit file has multiple categories, it is extremely difficult to transfer results obtained by others to your report and scoring.

[cashnocredit]

Rebucketing occirs on clean files. I discovered a particular point of rebucketing which is when your oldest account reaches 4 years.I discovered this rather rudely when my oldest account reached exactly that. With no other change in balances or reporting my FICO score dropped from 755 to 703. In the new bucket the number of cards with non zero (no matter how small) balances becomes far more important and if all your CCs report a small balance your score gets killed. It was actually lower than 2 years earlier when I still had a PR and CA reporting. After a bit of experimenting and zeroing out 2 of my 3 CCs my score completely recovered. This occurred when my util was around 10% the entire time.

Oddly, this was only EQ 04 FICO, my TU 98 FICO did not see these effects.

[AndySoCal]

A buucket in terms of a scoring model like FICO is called a scorecard.  The FICO score ( FICO 08) has several scorecard.  The score model looks at your credit for varying credit charteristics (my term) from those characteristics it determines which score card to use.  You use the link below which will give some information about the FICO 08 score and how they use scorecards to some extent.

http://www.fico.com/en/Products/Scoring/Pages/FICO-score.aspx

In ordered to get "rebucketed" their needs to a change in your credit  characteristics. For example, going form a credit report that has derogatory accounts to a credit report without  any derogatory accounts would change the score card being used.  Look at the score reasons that is helping or hurting  your score for a new reason(s) this could but not always indicate a change in how the ficoe model views your credit profile depending on the reaason.

[smallfry]

Once my AAofA reached 6 years my gorgeous 826 Experian became a 809. Rebucketing.

[masscredit]

So, a person like myself with a BK from 2/2010 and a few tax liens (ok, 5) will be in a "bad credit bucket". But, I can have 3 1/2 years of on time payments and decent utilization so that could look pretty good in a way?  Kind of like a previously bad person doing good things. It can be more impressive than a person that's always been good. Am I on the right track?

[atarvuzdar]

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@masscredit wrote:

So, a person like myself with a BK from 2/2010 and a few tax liens (ok, 5) will be in a "bad credit bucket". But, I can have 3 1/2 years of on time payments and decent utilization so that could look pretty good in a way?  Kind of like a previously bad person doing good things. It can be more impressive than a person that's always been good. Am I on the right track?

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FICO would look at your overall profile and compare your 3.5 yrs of on time payments after the BK and tax liens to the overall profiles of everyone else in the "dirty" bucket you're in. I would imagine you would be compare favorably since 3.5 yrs of on time payments is good for people who have BKs and/or tax liens. You'd be the big fish in a little pond.

Take away the BK and tax liens and you go into a "clean bucket". Now, all of a sudden, your 3.5 yrs of on time payments is more par for the course--ie. there are more people in the clean bucket who have 3.5 yrs of on time payments, or even more years of on-time payments. You would then look "average". The big fish in the little pond got moved to a bigger, more competitive pond, in essence. This may cause your score to fluctuate (negatively), but over time, your score would increase and would eventually get to a point where it was higher than you could've ever gotten if you stayed in the BK/tax lien bucket.

Having 3.5 years of on-time payments is impressive for someone who also has a history of BK or tax liens--because most individuals with a BK or tax liens don't have 3.5 yrs of good payments--but it's not all that impressive for someone with a clean credit history, thus the potential for a score drop. However, even if your score drops a bit by being rebucketed into a clean bucket, chances are good that creditors would still look at you in a more favorable light with the lower score and clean credit history than when you had the BK/tax liens. In fact, some creditors flat-out deny credit to people with high scores because their file shows BKs, collections, liens, etc. In other words, creditors don't just take your score into consideration... they look at the actual content of your credit profile, as well.

[masscredit]

I don't mind being the big fish in a little pond for awhile. I'll take that and the rish that might be associated with being declined before of the BK and liens.  I was able to get my car refinanced at 1.99%. It was at 17.1. The first person that I spoke with didn't think I'd get aproved.  One of my Cap 1 cards was up to $2499. on a $2500 CLi a few weeks ago. Paid that off before the statement closed. My other Cap 1 has a $950. limit with a $0 balance. Target is $1500. That will be paid off next week and Barclays is $3500.on a $3700. CL That will be around $1700. by the time the statement closes on the 25th and will be the only amount reporting. 

I figure that will give my score a decent bump and make it more likely for me to get a CLI for Walmart and JCP. It's been a year with those cards so I don't think they can use the "lack of experience with the credit line" reason anymore.  I'm also going to try to get an increase on the $950. Cap 1. The other Cap 1 closed yesterday so just waiting for it to report before I do that.