Was I re-bucketed or something?

[wasCB14]

My TU according to both Discover and Barclaycard-provided scores (both less than a week old) fell from about 780 to 733 in the last month. Puzzled, I got the full report from annualcreditreport.com.

Nothing amiss in the report. It's just a sea of green "OK"s.

No new accounts in the last 6 months. One TU inquiry 18 months old. No baddies. 2% utilization overall, with balances on 7 of 13 open cards (which is normal for me, and no single-card utilization was high). No installment history, just 13 open cards (and one closed). AAoA just under 2 years. Everything has "Current" status.

Is it likely I was re-bucketed? 47 points is a big drop.

The only other explanations I can think of would involve TU thinking a card was inactive. One card hasn't had a balance report for 8 months. Another hasn't had a balance report for 6 months. A third had a balance report for the first time in the last 14 months. I was using them during that time, but not much, and generally paying before the statements cut.

No apps planned for a few months, I'm mostly just curious what might explain this.

[Sbrooks1]

I'm thinking it is the card that had not reported a balance in 14 months. Just my opinion though.

[Anonymous]

For clean profiles, scorecard assignment in FICO 8 is based on three factors:

(1)  Age of oldest account

(2)  Age of youngest account

(3)  Total number of accounts (i.e. whether or not you are a thin profile)

#3 couldn't be at issue since you have so many accounts.

What is #1 and #2 for you?  (Include closed accounts if appropriate.)

[wasCB14]

---

@Anonymous wrote:

For clean profiles, scorecard assignment in FICO 8 is based on three factors:

(1)  Age of oldest account

(2)  Age of youngest account

(3)  Total number of accounts (i.e. whether or not you are a thin profile)

#3 couldn't be at issue since you have so many accounts.

What is #1 and #2 for you?  (Include closed accounts if appropriate.)

---

Oldest account just over 3 years. Open.

Youngest account just over 6 months. Open.

13 open, 1 closed...consisting of:

11 open major network credit cards. 1 open store-only card. 1 open Amex charge card. 1 closed (on good terms) Amex charge card.

No Amex backdating, for that matter.

[Anonymous]

Your rebucketing hypothesis has some real possibility.  Right around the time that your score changed, your age of oldest account crossed over from 2.9 to 3.0.  Age of oldest account is one of the three factors used in scorecard assignment.

[Anonymous]

I don't know how I feel about rebucketing.  I think maybe the ranges on the buckets are a bit bogus.  Using the data from the OP, I don't think that one should ever lose 47 points from being rebucketed to a "better" bucket based on "better" profile data... such has crossing from 2 year AAoA to 3 year AAoA for example.  Losing a few points sure, but 47 is significant and could make a difference in obtaining the best interest rates in many cases.  Maybe not for the OP considering his scores, but for others it surely could.  Ironically, assuming AAoA was the deciding factor here, if the OP were to open a new account today, next month when it reported he'd likely get back those 47 points, maybe 40 net after the inquiry/new account.

[newhis]

+1

Going over the 3 year mark on oldest card and 6 months newest card, doesn't make sense. Unless there is a higher risk someone having oldest card over 3 years (than 2), with AAoA of less than 1 year, I mean, crossing the 3 year mark on oldest account.

My DW is close to 3 year mark on oldest card. Her AAoA just crossed the 2 year mark. I don't expect a score drop.

OP, if you can, pay the 3 cards you mention and report $0 again.

Any of your cards is above 30%? or higher and was not that high last month?

[Anonymous]

Hi BBS, hi newHis.  You guys are both using the abbreviation AAoA connected with the possibility of re-bucketing (scorecard reassignment).  Just for clarity, the factor that might be involved is AOA not AAoA.  AOA is age of oldest account -- AAoA is average age of accounts.

I am definitely not saying that re-bucketing is for certain (or even probably) what happened.  But given that his AOA went from 2.99 to 3.0 at almost exactly the same possible, the answer to the question in the subject line is: Yes, given that one of your three scorecard factors may have crossed a threshold value, it is possible.

By way of contrast, if none of those three factors had crossed a possible threshold, I woild have said "it's gotta be something else."

To give a metaphor that may make rebucketing seem less baffling, here is one from high school that should be familiar.  Suppose you have two football teams, the one from junior high (grades 6-8) and the one from high school (grades 9-12).  Johnny is a huge success in his last year on the junior high team -- he's bigger and stronger and has been playing longer than most of the other kids.  Then he crosses over into high school.  He's now on a different team.  Suddenly the guys are much bigger and he's the one with the LEAST exerience.  He's getting run over!  The good news is that if he hangs in there for just a little while, he will by comparison start being much better than some of the other guys.

Rebucketing is like that.  I agree that the score drop is bigger than I'd expect so reB may not be the explanation or only past of it.  But we should expect (by way of the football story above) the possibility of a score drop.  Johnny can't stay on the junior high team forever.  And when he is switched over, it will seem hard and even unfair at first.

[newhis]

Thank you CreditGuyInDixie.

I tried to explain that  a 2 year AOA with less than 1 year AAoA could be better than 3 year AOA and less than 1 year AAoA (different bucket).

DW will be crossing 2->3 year AOA but last month she crossed the 2 year AAoA. My guess is that her score will not drop as hard as OP, because she will be 3 year AOA and 2 year AAoA, and because she is paying down her BT card and car loan, maybe the score will not drop at all.

Do you have any information about cards without balance for 6 or 14 months, sudenly reporting a balance, if that changes the score?

I don't use a card every month, and last month I let it report and I lost about 12 points (I think because of this), from 801 to 789. Maybe the last time I used it was 6 months ago.

[Anonymous]

CGID,

I misread what you wrote regarding AoOA earlier; I read it as AAoA which is why I responded the way I did.  My apologies!

I like the football analogy above and think it makes sense with respect to rebucketing.  However, one thing is missing from the equation.  With the football analogy, we have the luxury of human rationalization.  We can easily rationalize why Johnny was better than average on the 6-8 team but below average on the 9-12 team.  To assign some FICO scores to this for fun, perhaps Johnny was a 780 on the younger team and he's only a 660 on the new team for now until he grows, gains experience, etc.  Someone scouting the team however has the ability to consider previous data (his previous 780 prowess) and can likely deduce that the current 660 is in fact not necessarily representative of Johnny's upside.  I don't think in this situation Johnny would be looked adversely upon.

With respect to credit rebucketing, to my knowledge the algorithms don't take into account past data.  There's no human rationalization in the score produced and it's more or less taken at face value.  There's no way on the surface of looking at the new, lower score and determining if it's a "Johnny" and will be a 780 in a year or two or if it will stay at 660.  Hopefully that makes sense.  A creditor pulling someone's credit report gets a report and score and can't see what "bucket" someone is in; they can't determine what team Johnny is on.  All they can go off of is what they see right now and the score that goes along with it.

I guess my argument is that FICO scores are supposed to be a product of the credit profile and accurately (as loosely as that word is used) predict risk.  If factors are changing that are lowering the perceived risk, such as aging accounts for example, it seems counter intuative that a positive change results in a score that's less representative of that updated profile.