Tuesday, December 11, 2012

Credit Score Scam

I have long known that credit ratings were a scam. They are more a judge of how much of a sucker you are than how much of a risk of default you are. Those who pay tons of interest on time will always have the highest credit scores.

I did not realize just how bad they are until today though:

In the past four years I have paid off around $20,000 in student loans and credit card debt.

I have no debt at all.

I have nearly a decade straight of paying utility bills of one form or another including many years of paying rent to large apartment complexes.

I have a credit card which is at least six years old (but I stopped charging anything to in the past year or so since the interest rates are damn near criminal.

I have three and a half years at one job in one of the more stable industries there is.

So I figured when getting a home loan my credit would be sufficient. I am obviously someone who can be trusted to pay back a mortgage.  No luck. When the bank ran my credit score it came back as inactive because I haven't had any debt for more than six months. Not only would they not send the bank a score, they wouldn't even send them all the information about the credit history they do have. The 20,000 in debt I payed off in the past four years? All kept secret as punishment for my refusing to play their game.

Fortunately I will have in excess of a 20% down payment. There clearly are banks with intelligent people who will go through manual underwriting, or some other procedure to take what is obviously free money to them. Still, this really makes me want to find a way to push for reform in this industry.

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