Dave Ramsey and zero credit score?

I am not a Ramsey follower, but sometimes listen to his radio show.
He has quite a large following and I admit I am curious why.

I think I heard him say yesterday that he sent for his credit score and it was zero. He wasn't concerned about that at all .
Someone emailed him and said they would like to make bumper stickers says something like "Aiming for a credit score of zero"

I am not an expert on credit scores. In fact, I know very little, but from what I do understand I thought scores were important for things other than appyling for credit cards, which I know Ramsey is against.
Doesn't the insurance co you choose base your rate on what your credit score is? What about some job applications? I read somewhere that is easier for these co's to just look at your score rather than sift through your whole credit report.
I can see where Ramsey wouldn't have a problem with no credit score, because he is a well know radio personality and is making big $$$
But what about the average Joe/Jane who listens to his show? Is aiming for a zero credit score really in thier best interest?

Bonnie

[sweeps]

Dave Ramsey has been a popular topic recently.

I don't know if Ramsey actually said that, but if he did it is very irresponsible. Credit scores count for a lot more these days than just getting credit. It helps you open high-yield savings accounts, it helps lower your auto insurance premium, it's even a factor at some employers when trying to get a job.

About Ramsey in general... It sounds like his advice is targeted to debtaholics. People who have tried but cannot for whatever reason use credit responsibly. For those people, yes, avoid credit, pay for everything with cash, etc. etc. People who CAN be responsible with credit can make much better use of their time not listening to him. IMHO.

Originally Posted by Sweepsplayer

Dave Ramsey has been a popular topic recently.

I People who CAN be responsible with credit can make much better use of their time not listening to him. IMHO.

~~~~~~~~~~~~~~~~
I'm not glued to the radio listening to him. I am usually in the car and will listen sometimes. It's interesting to hear peoples stories
.
Since he is getting his own TV show I would love to see another kind of show..maybe called Debtors Challenge where a group of financial experts would hear
someones money woes. Dave Ramsey, Elizabeth Warren, and Suze O. would give that person advice.
The sparks would fly!

[Writer@Large]

Ramsey has a zero FICO score because it has been more than 7 years (IIRC that's the measure) since he had any debt. Yes, he's proud of it, and I cannot blame him; credit scores are a pox upon personal finance and the Ameerican economy. Seriously, there was a time--like, most of recorded history--where we didn't have credit scores. Why are they so vital now?

Ramsey isn't advocating that people ignore their credit scores. He's advocating that people become responsible with their money, invest wisely, and get themselves in a financial position where their credit scores is meaningless. I'm only on the second step in that plan myself, but it's a noble goal.

--W@L

?

Ramsey isn't advocating that people ignore their credit scores. He's advocating that people become responsible with their money, invest wisely, and get themselves in a financial position where their credit scores is meaningless. I'm only on the second step in that plan myself, but it's a noble goal.
~~~~~~~~~~~~~~~~~~~~~~~~~~~
I am not crazy about the credit scoring system either, but as long as the system is based on that I want to have the best possible score I can.
Who wouldn't want their car insurance at the best rate and a host of other things at the best possible rate?

When a listener is
writing to Ramsey suggesting getting bumper stickers that say,
"I am aiming for a zero credit score"and he is laughing about it, it sure seems like he is advocating it to me.
Not very responsible in my opinion.

[Writer@Large]

Originally Posted by allyourworth

When a listener is
writing to Ramsey suggesting getting bumper stickers that say,
"I am aiming for a zero credit score"and he is laughing about it, it sure seems like he is advocating it to me.

You're missing the point ... or, rather, the context. He's not advocating a zero credit score in a vaccum, but as the consequence of an overall financial plan & goal.

--W@L

[Ima saver]

I think a high credit score is very important. When I pulled my score a few years ago, I was told it would have been higher if i had a mortgage loan. The fact that my house is paid for and worth a half mil. should count for something.

[jmjj215]

I read Ramsey's "Financial Peace" when I was 14 and decided I'd live by his principles. I did until I was 22 and got married. We applied for some car insurance and my rate was double what the agent said the "going" rate was because I was an unknown. I had no credit history.

We signed up for a cashback credit card and put every purchase we can on there - pay it off, no interest, yada yada (we get a month's worth of groceries each year with the cashback).

My point is that the credit score (or lack of one) can cost you real money. I think it's irresponsible of Dave to tell people not to "worship at the altar of the FICO score." I understand he's being entertaining and doesn't mean that exactly (and people don't do that exactly), but he's ignoring natural market forces - the score is being used by much more than just lenders. And yes - it is a good statistical indicator of certain tendencies. If you don't have one, you're an unknown and will miss out on that benefit.

I've heard him tell people not to worry about their credit score over and over and over again. Ouch to people not making a million dollars a year who actually care if they have to pay $300 more in car insurance premiums each year as a result of his advice.

[Haku]

Well, debates of almost any subject often comes down to two basic kinds of people. (And yes, my apologies for over-simplifying things. )

Thinkers and Followers.

Followers don't think. Followers naturally assume that someone or something is inherently good or bad, and that's it. Because followers don't think, it's also hard to change their mind, even though they expect everyone else to think like the way they do.

Thinkers, on the other hand, do exactly that. With any subject, they weigh the pros and cons and draw their own conclusion as to how it best applies to any given situations. They may or may not agree with, say, Dave Ramsey in this case, but at least it's based on some kind of informed, critical analysis.

When I say this, I'm not pointing fingers at anyone in this thread, or even necessarily on this forum. Actually, I'm venting more along the lines of the heated debates from elsewhere on the weighty matter of Nintendo Wii vs. Sony Playstation 3 vs. Microsoft Xbox 360.

Still, I think the fundamentals apply with any subject, and I naturally advocate being a thinker. If you happen to fully agree with the guru of your choice, please let it be because what he or she said makes rational sense, not just because he or she said so and they can do no wrong.

That said, I have to agree with many of you. Dave Ramsey is great for those who are taking those first steps of getting out of debt. After that, certain advices can be harmful to your financial health if you continue to follow it. Like the financial equivalent of chemotherapy, I suppose. Your credit rating is one such example.

Personally, I have great respect for Mr. Ramsey, even if I don't necessarily agree with everything he says.

I can't say I have respect for Ramsey, but then I don't know the man personally.
All I know about him is reading interviews online and listening to his radio show occasionally.
In the Failure magazine interview he makes remarks about the shame of bankruptcy and
seems to question a persons integrity by how much shame they feel afterwards.
He says most people are not morally ablivalent to file.

the truth is most people file as a last resort and most bankruptcies are because of health problems, divorce, and job loss.
He is speading the same garbage that politicians used to pass the new bankruptcy bill into law which Bush gladly signed for some of
his best buddies and biggest contributors!

When asked what's the downside of filing bankruptcy he states:
You owe the money and it's wrong. It's a moral issue.
Yet, Ramsey won't say if HE REPAID HIS CREDITORS after he got back on his feet after filing bankruptcy!

I belong to a list where a woman wrote yesterday her and her husband were heavily in debt. She admitted over the years her and her husband had been irresponsible with credit cards.
Yet, making the min payments with her other obligations they only had $100.00 left at the end of the month. I don't know if this woman is sucicidal or not but she did say in her note she was desperate and mentioned she would be 6 feet under soon .
After I suggested she look into filing bankruptcy so she could get a fresh start I was attacked by a Ramsey follower who not only called me an idiot, but also a freaking
prick and suggested I jump off a building and then go get a cat scan to see if I had a brain.
His advice to this woman was the same old same old eat beans and rice and get second jobs, sell your car etc.
One size fits all just doesn;t always apply.
This poor desperate woman has not posted anymore notes, but I can only hope she will at least look into bankruptcy PROTECTION, because she needs it.
The man who attacked me
has the same old line that Ramsey gives in his interview that bankruptcy will be something you will regret and be hard to recover from.
The truth is many people recover from bankruptcy and go on to do very well.
If Walt Disney
hadn't filed bankruptcy, the world may never have heard of Mickey Mouse and all the other characters he created.

There are a whole host of famous people who been down on their luck, made mistakes, and filed bankruptcy and recovered.
I feel ramsey and his followers who discourage bankruptcy at all costs are only prolonging the enevitible for many. And who will benefit? Ramsey by selling his books and most likely the credit card co's who will be getting mounds of loan shark interest fees and other charges from people who are trying to follow his plan when they should have filed bankruptcy and gotten the fresh atart so many need and deserve!

[Ima saver]

allyourworth, what group or list do you belong to? I certainly think you were treated very rudely!

Originally Posted by Ima saver

allyourworth, what group or list do you belong to? I certainly think you were treated very rudely!

~~~~~~~~~~~~~~~~~
It's a DR yahoogroup.
It was only one guy who attacked me. Many of the members posted notes this guy should be kicked off or at least moderated.
Nobody agreed with me this poor soul in such a dire situation should consider bankruptcy. Oh well,,, we'll all entitled to our own opinions.
I'm all for people paying their debts, but if a person can't do it in a timely manner then bankruptcy should be considered,.
They can always repay the CC co's after they are back on their feet.
I can't imagine any Cc co refusing their money! LOL

[Ima saver]

I think there are certain circumstances where filing bankruptcy is necessary.

[debtfreesteve]

Well, I'm one of those irresponsible people, who failed miserably, to 'manage our credit scores'... I'm a Dave Ramsey guy, however I won't attack anyone for having different opinions. I will argue a few points though. 1st off, I'm fairly certain Dave Ramsey was against the new bankruptcy laws, as he indicated Washington was bought by the credit industry to enact it.. He speaks on the shame of bankruptcy, as he and his family had to file.. It's ok to say something is shameful, if you been there and experienced it. A lot of times, when Dave gets to the meat of the debts involved with callers who think they need to file, he breaks it down to where they are filing on a much smaller amount, that they really thought.

As far as the credit score goes, I want mine to be meaningless. I can sacrifice a little a month, on car insurance rates, so that my family have zero payments. If one of us loses our job, gets sick, et all, it won't really matter, we'll get by just fine as we'll have 'money'. That's peace. 2.5 years ago, I had $125,000 in student loans, credit cards, car loans, and we didn't have any peace. My wife & I were clueless about personal finance. We had tried, the 'paying off the highest interest rate cards 1st', however we didn't have a budget to figure out the amount we could pay, and we never got that 1st win, of paying the 1st one off. We knocked them things out very quickly using Dave's plan. At that time our credit scores were fair.

In about 3 months, after we pay off our last $13,000 from that $125,000, my wife & I will have a few thousand $'s every single month, that we can do what we want to with (invest give & spend).
Our credit scores might plummet, however we don't care, life will be good.

I guess the challenge should be, how can we maintain a high credit rating, without using credit cards, not taking out any type of loans?

It's a flawed system. A credit score, should measure what? The ability to pay back a loan, correct? Car insurance rates should be determined by driver history, and that's why you have seen a few states pass laws to prevent the rates to be determined by credit history.

If you don't have any payments, a solid emergency fund, and you want to change careers, you have no pressure to work for a company that would deny you based on a fico or beacon score. You can work somewhere else.

Just my opinion, in my simple feeble minded world, the worse our fico scores have gotten, the wealthier we have become.

[Ima saver]

Good for you, debtfree, you have done great!!

[debtfreesteve]

Thank you Imasaver...

[Writer@Large]

Originally Posted by Haku

Thinkers and Followers.

Followers don't think. Followers naturally assume that someone or something is inherently good or bad, and that's it. [...] Thinkers, on the other hand, do exactly that. With any subject, they weigh the pros and cons and draw their own conclusion as to how it best applies to any given situations.

Then I'll gladly claim my title as a Thinker. I like Ramsey and have found enormous value in his advice. But I haven't dived in blindly. I have used his Total Money Makeover as a jumping-off point to find out a lot more about the not-so-common commonsense of financial responsibility. And so far, nearly everything Ramsey has recommended I do to take control of my financial situation has worked, and many of his opinions ring true with what I read elsewhere.

Frankly, I hated the FICO score even before finding Ramsey. Knowing that people out there have successfully found a financial place where they can tell FICO to go fico themselves is heartening. I can't wait to join them!

--W@L

[jmjj215]

where they can tell FICO to go fico themselves is heartening

Good for a chuckle to myself early this morning!

[cbmeeks]

I may be wrong on this, but if I am wealthy, what do I care what my credit score is? Sure, it may affect your insurance premiums but by how much? Cash is solid. If I call a bunch of companies for a quote and I offer to pay in cash for the whole year, I could probably get a good rate.

[jmjj215]

If I call a bunch of companies for a quote and I offer to pay in cash for the whole year, I could probably get a good rate.

In my specific situation, I offered just that, "I'll pay the entire premium up front." and he said it had nothing to do with offering cash. Because I had no credit score, I was an unknown and was, therefore, getting the "bad credit" rate.

When I'm wealthy I probably won't care about my credit score, but I'm not - so saving $300 a year in car insurance was a pretty good thing for us.