Score Drop 23 points from collection removal!!

[llecs]

FAKO is as FAKO does.

[sjt]

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@Anonymous wrote:

It sounds like you may have been "rebucketed." Bucketing is a term that is used to describe a system of comparing credit profiles that are similar to each other. With the collection removal, it's possible that your profile is being compared to others that are collection free. The good news is that your scores will now have the potential to grow higher than they would have if you had stayed in your previous bucket.

A good explanation of this is from an older thread:

"Ultimately the rebucket will allow your scores to reach higher. You are now being compared to others with squeaky clean files and long histories. Since you have just been added to this bucket you do not look as good as the rest of the pack (shorter history than the rest for example). As your accounts age your scores will rise in this new bucket--do not worry. 8 pts is not a huge drop--others have posted much larger drops upon a rebucket.

I prefer to think about buckets like this: If there were no buckets and everyone was simply compared to everyone else it would be very hard for anyone just starting out to have hope for good scores. A person with a thin or short file would look very risky versus someone with a long established history. Hope this makes a little bit os sense, keep up your good work--your scores will rise!!"

The complete thread can be found at: http://ficoforums.myfico.com/t5/Credit-Cards/Why-would-i-get-a-8-point-drop-in-my-score-because-i-was/m-p/567229/highlight/true#M180339.

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Hi-

Thanks for your explanation.

I need some clarification to make sure I have this right:

1. Each person with a credit profile is put in a "bucket" or is put under a certain classification based on their profile.
2. So person X ,who has a collection for $xxx, then pays the whole amount could be reclassified to another bucket and their profile will be compared to those in that bucket.
3. When they are reclassified to another bucket, their score can drop because their profile will be at the bottom of that new bucket they were put in. However there is a potential to achieve a higher score in this new bucket they were put in.