Credit Scoring is like a Teeter Totter

Back in the days when it was okay and acceptable to have dangerous, limb-breaking, skull-cracking playground equipment on school playgrounds (You know, the kind of toys that were actually fun to play on?), I remember fondly the HUGE Teeter Totters we had next to the Kindergarten Portables at Fern Hill Elementary in Tacoma, WA.

Possibly my perspective is affected by my advancing years and the fact that the memory was placed in my brain using my elementary-school-size brain, but I swear that those 3 side-by-side teeter totters had to be 45-50 feet in length.  I mean, if the kid on the other side tried to yell a challenge or taunt at you, he was so far away that you’d see his lips move long before the sound ever reached you.  Yup, those were some big teeter totters.

Having one person on each side – gently teetering and tottering back and forth?  Nah!  (Well, sometimes the “girls” would do it that way.  But not us “BOYS!”)  It might start with one kid on each side, but the fun began when others started piling on. 

If a big kid had a little kid pinned to the sky, you’d see 2-3 other kids come to the rescue – rushing to add enough weight to the little kid’s side to send that big kid up to the sky himself.  And if they could do it fast enough, and they lifted their legs up so the end of the board smacked into the ground, they could sometimes make the big kid go flying off the end as the impact vibrated through the fulcrum and slammed full force into his unsuspecting bottom.  Oh the fun of that Oh No look in his eyes and the subsequent flat on his back splat! 

And then you’d move to the next stage where each side of the teeter totter was rushed by “teams” of boys.  Having 10-20 kids on each side (and again, maybe it’s possible the memory might have added a few kid’s bodies over the years) became a contest of wills and strategy.  Pretty soon, you’d have the manly boys standing towards the center of the teeter totter, trying to push each other off to reduce the weight of the opposing side in order to give their own side an advantage.

The winning strategy came down to two ideas:  1)  Increase the weight on your side while 2) Reducing the weight on the other side.  That’s how you won – make your side heavier AND make the other side lighter.  All at the same time.  Both strategies going at the same time.

And that’s how credit scoring works! 

Over the years, I’ve helped hundreds and hundred of folks improve their credit scores so they can qualify for a home loan or get a better interest rate.  There are many tips and tricks I share with them (Check out the many articles here for more ideas), but ALL the strategies are filtered through the Teeter Totter Test.

If the strategy helps reduce the weight on the “Bad Side” of the credit teeter totter, it is a good strategy.  If the strategy helps increase the weight on the “Good Side”, it is a good strategy.  But what is hardest to communicate to these clients is that they must absolutely work on BOTH sides of the teeter totter at the same time!  You cannot just reduce the weight on the bad side and hope the score will go up if you have no weight on the good side.  Teeter totters don’t work that way and neither does credit scoring.

You cannot just reduce the weight on the bad side and hope the score will go up

A potential client with lots of bad credit should start right away building good credit accounts.  Don’t wait until you have all the bad credit taken care of.  Open active good accounts gain momentum and points the longer they have been opened.  Waiting to open them until the bad stuff is gone will delay the credit score improvement.

And if you get enough good credit going – just like suddenly adding several kids to one side of a teeter totter – you can create enough momentum to “bump” some of the bad credit off the other side.  It may not actually go away, but it will be so outweighed by the good stuff that its impact will be diminished to the point it doesn’t really hurt all that bad anymore. 

Related Articles:

• Repair Your Credit
• Debt Consolidation – What to Look For, What to Watch Out For
• Credit Report Errors? Or Deliberate Misreporting?
• How to read a credit report to improve your score
• Watching Your Credit by Ordering Your Credit Reports

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