Credit Scores are a Scam

I moved back the states at the end of May this year.  I knew that this would be the place that I would live for a while, so I knew I wanted to purchase a home.  I also knew that I wanted to re-evaluate my credit cards and what I was getting from them.  I have carried 2 credit cards for a while.

For a long time the two cards I had were:
Card #1 - 10% of each purchase appeared as a point(s).  Each point could be used for discounts on items from their selected store.  Being that I was younger when I got this, it seemed like a really good idea.  However, the realization finally came to me that I was never using any points.  I didn't use any points because I never got anything for free, it was always a discount for some number of points that didn't correlate to the discount.  And, there was never anything I wanted.

Card #2 - When I bought my last Apple Computer, I noticed they were advertising a credit card on the Apple Store that would net you around 1% of every purchase towards an iTunes gift card, 2% for purchases made from Apple.  I have been using this card for some time and almost always have some sort of credit in the iTunes Store.

So, when I got home I decided to cancel card #1 and get a card that would benefit me more.  So I opened a new account.  The new account had a lower limit, but I am never near that limit anyway, so I don't really care.

A few months later, I finally found a house that I liked and went through the paper work to buy it.  When the loan was finally approved they sent me a packet of information.  One piece of that packet was a report that had some reasoning of why my credit score is what it is.

These are all paraphrased:
Reason #1 - Too much cash, not much debt
Apparently I pay my bills on time and that is a bad thing, I also live within my means.

Reason #2 - Not using enough credit
I have 2 cards, I pay them both off each month, and I am never close to the credit limit on either.  Apparently this "living within your means" thing is really not what they like.

Reason #3 - Short length of accounts held
Well, I am sorry that I went out and found something that benefited me more, next time I will just let the credit card companies take advantage of me.

And that is when I realized that is exactly what is happening.  Credit scores aren't just about how credit worthy you are, they are about how much money the bank is going to make off of you while you hold credit with them.  Credit scores are a scam.  Banks could have increased my interest rate based on this report because I am responsible and don't spend more than I should, and they would do this because they knew from my credit history that I might pay back the loan early which would result in them not making all that interest money.

Why does your credit score suffer when you close a credit card account?  Because that is a little less money that they may make off of you.

Why does your credit score suffer when you pay off your entire balance each month? Because that is a little less money they make off of you.

Why would you credit score suffer if you live with in your means?  Because they know that you will never net them as much money as someone who makes late payments and carries a balance.

I say we revolt and revamp the credit reporting agencies to more accurately reflect how credit worthy we are.

More On House Buying

So, the offer was accepted a few days ago, the inspection has happened, I have told the financing people that everything is going through, I have called the insurance company to tell them and get my quotes in order, but I don't know whats next?

Can anyone tell me if I should be doing something?

I feel like there has to be something that I need to be doing. I haven't had a phone call or any conversation with anyone about the house in 3 days and that is just a little weird to me. Isn't there things that have to be done between now and the closing?

House

On Monday I made an offer on a house. It is basically exactly what I was looking for, with the exception of the fact that the lot is only 8,000 sqft. I was hoping to find something with a half acre+, but I put that aside when I figured out that would put me pretty far outside the city.

Tuesday passed with no word.

Wednesday passed with almost no word.

Thursday afternoon, the seller's gave me a counter offer and today I am accepting that.

I am pretty excited to get out of apartment living, I am excited to have a yard to barbecue in, and I am excited to get a tax deduction.

How To Save the United States Money

In one fell swoop, I can save the country almost 40 Million Dollars annually, and it isn't by any tax or by changing any social program. I know 40M sounds like a small amount, but if we extend my plan further it could end up being more.

1. Cut the salary of Senators by $80K per year.
Senators currently earn almost $180K per year. If we were to cut that back to a less lucrative wage, $100K, I think we could solve a lot of problems while still paying them more than they should make.

A. We would save $4M per year just in salary alone.
B. We would attract people who are interested in serving rather than people looking to make a career of being a public servant.

2. Cut the salaries of Congressmen by $80K per year.
In a similar type of cut mentioned above, we could save $35M. Now we are at almost $40M of savings and no one has been hurt too badly.

3. Equalize the salaries of Congressmen and Senators.
Senators and Congressmen in leadership roles earn anywhere from $20K - 50K more than their counterparts. Why? This is something that is a public service and people should want to do. If we were to equalize the salaries, we may get people better suited to public service roles.

I think this gets my point across, but there are many other cuts that we could make in this line that could save the country a lot of money while retaining a sense of what the positions were supposed to be.

As a final thought, Benjamin Franklin suggested during the Constitutional Convention that elected government officials should not be paid. This fits in a lot with the Federalist Papers in that our elected officials should want to do the jobs, keep them for a short period, and move on to, or back to, their given professions. The fact that we allow people to retain their offices for decades is beyond me as not a single group of them has ever proven that they are the right people to make decisions for our country.