Yeah it tries. It's based on the closest available people with open lobbies under your settings. So sometimes the actual best connection person you can play at as close to your level is a killer.

But, I suspect a problem with having around 500 PP in that people with that much don't start lobbies at the same rate as people higher up do. This is purely from my own experience, but back in the day before I started covering up points on my tv, I'm around 500 PP (both back then and now) and when I start a lobby in ranked i'll get like top 100 Whomever who comes in and bodies me. Then I'll open the lobby again and he'll come back and I'll say "well I should play some higher ranked players for exposure to that gameplay / to get better / learn from the tapes etc" I won't kick him and i'll try some different things in my strategy and he'll body me again. I start a lobby back up and a different guy who is way better than me will come in and do the same thing. That'll happen X amount of times then a dude who has almost 0 PP comes in and i lose fair and square (as far as our ability to play the game goes this happens on PSN a lot because busters make new accounts for free) and lose like 82 pts. So after 8 games I have won like 1 and my net value for my games today is -370. It's not worth the stress when you're starting out. So then it creates these players who are really anal about points and ranks because any match could mean losing like an hour worth of earned points.

Anyways, that's what I think about ranked. I play ranked a lot still, but i'm at a place where I just turned off the points on the HUD and don't look at em during the loading screen. I still don't play a lot of endless because forgetting to turn off edition select and 0 bp/pp warriors give me fits. Not a lot of people are my level on there. That's where I'm at, now. Helps me concentrate on playing the opponent and not the prior success of the opponent. But if your matchmaking is bad enough maybe you should look into whenever you come across someone around your level with a good connection, just go ahead and friend them. Get a group of like 5 or 6 people who like to play in an endless lobby together and do that. Get back in the ranked game with some more experience under your belt so you can get some W's against higher ranked players.