So I finally got Live and started playing Reach. When I got on it asked me to forfeit 90% of my credits to keep my look. I did that and it put me at 600 credits, made me a sergeant grade 1, and stuck me with crap armor. i turned the xbox off and went back to the game and it asked me again. I refused and it let me keep my credits. For some reason, though, it displays me as recruit everywhere and doesn't let me use my former look, even though I have it seleceted, even off Live. When playing splitscreen firefight with my brother, I'm stuck in default gear. Can someone please explain to me how this system works?
I didn't have this problem as I was connected to Live from the beginning of the game, but I believe you have a significant reduction in credits + de-ranking when you connect to Live for the first time on Reach. Credits earned from offline play are also significantly reduced when connected. I think Bungie does this to encourage people to play more multiplayer once connected.
The majority of credits are earnt through anything that involves matchmaking once you are connected, and the rest comes from daily/weekly challenges.