What do A, B, C, and D paper grades actually communicate?
Paper grades are informal MCA shorthand and lenders do not define them identically. Which file characteristics typically influence the label, and where does the shorthand become misleading?
10 replies
Treat an inferred grade as shorthand and explain the facts that influenced it rather than presenting it as verified lender criteria.
Credit, cash flow, time in business, positions, negative days, and industry may all matter, but lenders weigh them differently.
A lender’s published paper type can be shown as lender-provided; an algorithmic grade must remain separate.
Should a paper grade alone determine which lenders receive the file?
No. Use actual sourced criteria. The grade can summarize the file profile, but it cannot replace the lender’s own rules.
Avoid presenting lower grades as moral judgments. They describe risk characteristics and product fit, not business quality.
Any team using grades should define its ranges and show which important inputs were unavailable.
Do not fill missing underwriting facts with estimates merely to produce a grade.
If a lender verifies that it serves certain paper types, preserve that statement with its source and date.
Label the grade as estimated, expose the method, keep missing facts visible, and match lenders on real criteria.