Dave Ramsey and zero credit score?

[debtfreesteve]

Re: Dave Ramsey and zero credit score?

Thank you Imasaver...

[Writer@Large]

Re: Dave Ramsey and zero credit score?

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]

Re: Dave Ramsey and zero credit score?

where they can tell FICO to go fico themselves is heartening

Good for a chuckle to myself early this morning!

[cbmeeks]

Re: Dave Ramsey and zero credit score?

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]

Re: Dave Ramsey and zero credit score?

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.

[Writer@Large]

Re: Dave Ramsey and zero credit score?

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.

I'm with you, man!

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.

... and a double . You're speaking my language, man. Just because FICO has become systemic, doesn't mean it isn't stupid, ill-concieved, misused, and nonsensical.

--W@L

[sweeps]

Re: Dave Ramsey and zero credit score?

I'm really stumped as to why anyone who is determined to save money and build wealth would happily:
- Spend $200, $300, $400 extra a year on car insurance
- Eliminate themselves as candidates for the best jobs
- Pay higher rates on their mortgage
just to thumb their nose at the credit card companies. It's beyond me.

[lillyb]

Re: Dave Ramsey and zero credit score?

The only way to keep a good FICO score is to keep debt, right? You quit borrowing money and you lose points. You pay off everything and have cash to buy things in the future your score will plummet eventually. I mean, the FICO score reflects how good you are with debt, in a sense. They need a better system, imo.

Let's say you drive paid-for cars, you own your home outright, and you don't have a credit card because you have an emergency fund and your debit card works just like a credit card would. And it's been like this for years. FICO would punish this person, score-wise, compared to someone who systematically pays Mastercard or GMAC. Which one is more financially responsible here? It's a messed up system. I don't want to pay interest fees to greedy bank shareholders for the priveledge of saving a couple hundred bucks a year for insurance.

I really like Dave's plan and it's working for tons of people. If I follow his plan (because I've thought about it and agree) then the worst that can happen is I'm debt-free, have money in the bank, my retirement is looking good, my children have an education, and I've got MONEY to buy things then I really don't care what my FICO score is. Why would I? If I need a job and they go only off a FICO number then do I really want to work for a company that is lazy and only sees a number? Hey, wait a minute.... I've got no payments. I don't NEED that job that badly.

[Snoopy2645]

Re: Dave Ramsey and zero credit score?

Well for along time I didnt pay attention to my fico I really didnt know much about a fico score up until 2yrs ago but thanks to paying my bills always on time & having some cc's that I was paying good on when my score was pulled it was over 700. Maybe Dave's saying dont pay attention to the fico just pay bills on time & dont be drowning in debt & etc & your score will rise. I dont know but thats my interpetation of it.

As for claiming BK for all I know dave ramsey did it donald trump did it & my best friend has done it 2 times & still is doing great so I think maybe it is for some people I know I could never do it but guess sometimes life happens & thiers really no other way!!

[sweeps]

Re: Dave Ramsey and zero credit score?

The only way to keep a good FICO score is to keep debt, right? You quit borrowing money and you lose points.

Carrying debt and maintaining a high credit score are not synonymous. I hold no debt other than my mortgage, yet I have a score in the 800's. I charge things to my credit card and I pay it off each month. It's as simple as that.

I guess I'm in the minority on this topic... I'll just have to agree to disagree.

[Bargainacious]

Re: Dave Ramsey and zero credit score?

It sounds like the banking industry, including CC companies and FICO, have engineered the system to ENCOURAGE debt. They reward debtors, so long as the debtors continue to pay. The banks etc. make money off interest. By paying off a mortgage or loan early, they lose that cash-flow and you are penalised on the FICO scale.

The whole credit system seems skewed to encourage people to have payments for everything (house, car, college, braces, TV, dog, new pool, vet bills.....). It fits in nicely with the instant gratification generation.

I find it interesting that some religions (Islam - Sharia law?), frown upon the lending of money for interest. Isn't there also the famous bible story of Jesus throwing the money lenders out of the temple? Now modern society seems to thrive on debt. Personally, I find the credit industry to be immoral, based on its predatory lending techniques and abuse of people's financial ignorance. Sometimes paying interest is necessary for a mortgage or student loans, but 62.5% on a BoA secured credit card (seen on CNN doc. on "How to rob a Bank) is outrageous IMO.

[sakigt]

Re: Dave Ramsey and zero credit score?

Carrying debt and maintaining a high credit score are not synonymous. I hold no debt other than my mortgage, yet I have a score in the 800's. I charge things to my credit card and I pay it off each month. It's as simple as that.

I guess I'm in the minority on this topic... I'll just have to agree to disagree.

I think the point is to eventually not need credit ever.

Kudos to them, but Im with you. Id rather keep my score high, just in case, than count on not needing financial help, ever!

Id rather stick it to the man by paying my bills before intrest is earned

[tomkat]

Re: Dave Ramsey and zero credit score?

Carrying debt and maintaining a high credit score are not synonymous. I hold no debt other than my mortgage, yet I have a score in the 800's. I charge things to my credit card and I pay it off each month. It's as simple as that.

I guess I'm in the minority on this topic... I'll just have to agree to disagree.

Well, I'll join your minority group! I understand perfectly what you're saying! I husband and I each have a credit card, but we pay in full each and every month. My debt is almost completely gone (I have $700 left to pay for a dentist bill, then I'm debt free other than the mortgage), and he doesn't have any debt (other than the mortgage), but we both have high credit scores...which is useful if you have to, say, make a very large purchase like a house.

It seems that Dave Ramsey's plan is for people who absolutely cannot handle debt under any circumstances, not those who use credit wisely.

[Haku]

Re: Dave Ramsey and zero credit score?

I think I may have mentioned this here before, but there is a difference between having a credit card (or a credit rating for that matter) and having a credit card DEBT. The two does not have to be joined at the hip. Simply use your card, keep track of it, and pay off the balance every month. If you can't pay it off each month, stop using it.

That's it.

[Ima saver]

Re: Dave Ramsey and zero credit score?

I agree Haku. I am also like sweeps. I have a fico score in the 800's and I have no credit card debt or mortgage debt. I use my card and I pay it off each month.