I've been working on my credit score for most of this year.

My wife and I would like to buy a house.  We sold the house I once occupied with my ex-wife, which was not in either of our names because of previous issues with credit, to obtain money we could use as part of a down payment.  I first started looking into buying a house, and what my credit needs to look like, late last year.

My credit has had its up and downs.  Don't get me wrong, my credit isn't terrible.  It's fair.  It's been good, and it's been bad, but right now it's fair.  Which, in today's credit market - in all it's glorious turmoil - seems to mean my credit is horrible.  But still, it's fair.

Over the years I've had a decent understanding of how credit works.  I've learned a lot more this year, but still, much of it is a mystery.  Credit scoring is a complex and secretive mathematical formula designed to predict the chance that you won't pay what you owe.  Knowing that, a lender can weigh the possibility that they won't get paid, and deal with you (or ignore you) accordingly.  It's a very complicated system which will surprise you once you think you have part of it figured out.  While I haven't cracked the mathematical code involved, I think I've come up with a decent analogy to explain how the credit scoring model works.

Most people are quite familiar with the school-based grading system: F, D, C, B, and A scores your work from poor to excellent.  When I was in school in North Carolina, 94 through 100 was an A, 87 to 93 was a B, 80 to 86 was a C, 70 to 79 was a D, and anything below that was a failing grade, or F.  While the numbers themselves change over time, and across the country, the F/D/C/B/A system tends to be fairly well understood.

Initially, the credit scoring system is a lot like the letter grade system, with some modifications.

First, if you've had any late assignments in the last seven years, expect your letter grade to be reduced.  For the sake of this example, let's put a minus sign on the letter.  So, if your assignments are worth an A, and you've been late in turning in any worksheets, homework, or projects over the past seven years, you get an A-.  The good news is, the record for those late assignments will be erased after seven years, so eventually (by graduating high school) it will be as if no one remembers you were late turning in that fish diorama in the fourth grade.  If you missed turning in that Edgar Allan Poe report in ninth grade, too bad.

Next, if the teacher you might have in the next grade decides to pull your report card records, you'll lose some credibility on your grade.  Once in a while is ok, but if they look at it numerous times in a year, you'll automatically be graded down.  Your A- would likely become a B.  So, don't have your teachers log into your student records too much, or it will hurt you more than sitting through Mrs. Blank's English class.

If you've passed a good number of classes, you'll do well with new ones.  But if you've had less than perfect grades in each of those classes, you could see your B turn into a B- or C, depending on how imperfect you were.  However, an A in Rubber Band Shooting 101 is just as valuable as an A in Advanced Underwater Astrophysics With Theoretical Imaginary Numbers in Green, Section Two.  While one was a bigger class, turning in your assignments on time and getting As is the same either way.  Over time.  Also, a class that assigns you more work is a class that will assign you a better, but similar, A.  If you turn in all your assignments on time, you'll do fine.  If you're late on one assignment, not only can you expect to have your grade lowered, but you could expect to see more assignments made, and more difficult ones at that, given to you until you make up that late assignments.  It'll make more sense as you go along.

Longevity is key.  So if you've been in school for more than a decade, that's good news for you.  However, for those of you with thirty or more years in school, you're able to accelerate your A grade into the highest echelons of grading, for which there is no describable grading scale.  For the sake of simplicity, we will refer to this grade as A+☺.  We use the ☺ symbol to denote an imaginary, semi-infinitive number, that we faithfully believe exists at about 850.  If you're unsure as to why we use this character, and why it semi-exists around 850, obviously you didn't take Rudimentary Quasi-Quarkish Posi-Particles On A Bed of Invisible Electron Caramelized Leavening.  It was in chapter threeish. ☺

Oh, and a quick note, checking your own grades won't hurt you.  You're allowed to look at it once, for free, but after that you may be required to sign up for a monthly service that monitors your grades for you, alerting you when your overall grade had been lowered or raised.  It's good to monitor this, because any inacuracies in your teacher's grading could result in further grading issues.  For instance, if Coach Wood gave you a B in health class when you really got an A, even though it wasn't your own fault, you'll see the effects of that B for the next seven years.  In the future, should you find an errant B or late assignment, you can dispute that grade or report and ask the teacher to prove your grade.  In most cases, they will not need to provide actual proof, however, if they neglect to respond to your claim within thirty days, that inaccuracy may be removed by the school system.  Be aware, though, that an incorrect report of an A only helps you, even if you didn't take that class, so don't mess with those.

At this point it may be prudent to mention to you that your overall grade can also influence the grade that potential teachers give you.  If you're known to be a C student, the teacher will alter their instruction to specifically make the class more difficult for you.  You will be required to sacrifice more of your time to homework, and you will likely be graded on a system different from an A student.  This is done simply because, statistically, you're less likely to do well on your work.  So they make it harder.  Think of it as a challenge, of sorts: a way for you to prove that you're worth a B, even though you won't actually be getting a B.

Lastly, I think it's also time to include that the more recent your grades in school, the more effect they have.  This should make sense; why should that report on Benjamin Franklin for Mr. Hale in the fourth grade be as worthwhile as that stick-figure drawing of Benjamin Franklin in AP Art during your senior year?  But still, if you're late on that worksheet for French class your senior year, shouldn't you be harmed more that that time in Gym class you caused that kid to fall off the balance beam and break his wrist?  The more recent the grade, the more worth it is, until it isn't recent anymore.  Then it's not nearly forgotten, merely remembered a little.

Oh, and I almost forgot, each teacher can use their own grading system.  An A for one teacher could be a C for another.  Things can be open to interpretation.  But it's OK, it's only your life over the next seven to thirty years we're talking about - it's not permanent.

I hope my analogy of the credit scoring model, as compared to the school grading system, made sense.  Believe me, it could have been worse. I could have included GPAs, too.

Enjoy your credit scores!  And your semi-D+☺-

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