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pioneerbasketball
Arkansas Fan
Team Bunchie
Member since Oct 2005
99995 posts

Can Someone Explain Dave Ramsey's 0 Credit Score
Am I missing something?

quote:

When it comes to credit scores, you’ll get a lot of bad advice: "Get a credit card or car loan to build up your credit. Don’t run up your balances, always make your payments on time, and never close your accounts." Basically, folks will tell you to go into debt and never get out. What’s more, they’ll tell you this is the only way to qualify for a mortgage.

But there’s another way—you don’t have to sacrifice your wealth at the altar of the almighty FICO. That’s the way normal people buy a home—and normal is broke. Take it from us: The best credit score is none at all.

So how do you become unscorable? It’s simple, really. First, pay off all your debt. Then, put all your credit cards in a blender and press chop. Never take out another credit card or line of credit again and let your credit score disappear.


Basically, he says that, if you follow his plan, you’ll eventually pay off all your debt. Your credit cards, your car loans, and even your mortgage will be gone. At that point, your credit score will be “indeterminable,” he says.

Ramsey says this is good news because, if you’re doing it right, you’ll never borrow money again anyway. “By this point in your life, you haven’t taken out a loan in years, you’ve saved a ton of money, and you’re paying cash for everything,”



C
Atlanta Falcons Fan
Houston
Member since Dec 2007
26451 posts
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re: Can Someone Explain Dave Ramsey's 0 Credit Score
I don’t think it’s true. You build credit in just paying off your phone bill monthly.


Paul Allen
Notre Dame Fan
Montauk, NY
Member since Nov 2007
63488 posts

re: Can Someone Explain Dave Ramsey's 0 Credit Score
He don’t believe in worshipping at the alter of FICO.


RedlandsTiger
LSU Fan
Redlands, CA
Member since Jan 2008
2549 posts

re: Can Someone Explain Dave Ramsey's 0 Credit Score
quote:

Never take out another credit card or line of credit again and let your credit score disappear.


I don't think it disappears. He's saying if you follow his plan, you won't need it and won't care. I told my kids that the easiest way to build credit was to take advanage of '90 days same ascash', etc. offers even if you have the cash. You get 'free' money and build your credit (just make sure you pay it off before the 90 days are up!).


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cgrand
New Orleans Pelicans Fan
HAMMOND
Member since Oct 2009
23226 posts

re: Can Someone Explain Dave Ramsey's 0 Credit Score
my credit score has been dropping pretty rapidly since I ended all my personal credit accounts. The only one I have now is spectrum TV/internet and I’m not sure they check credit anyway, and Entergy long ago returned my deposit

I doubt it will ever drop to zero but it has been going down steadily. Down into the low 600s last I checked
This post was edited on 9/13 at 10:56 am


cgrand
New Orleans Pelicans Fan
HAMMOND
Member since Oct 2009
23226 posts

re: Can Someone Explain Dave Ramsey's 0 Credit Score
this is not personal finance advice BTW (the Ramsey batsignal).
I’m moving close to retirement and I don’t want or need credit any longer. I absolutely needed it before this


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181
whitefoot
LSU Fan
Franklin, TN
Member since Aug 2006
7419 posts

re: Can Someone Explain Dave Ramsey's 0 Credit Score
quote:

He don’t believe in worshipping at the alter of FICO.

But isn't this the system that's in place to provide us the best credit rates and terms?

What if you're not at zero yet, but rather in the 600s like cgrand? Aren't you kind of screwed if you want a loan, or to refinance?

How do lenders view applicants who are at zero?

I get what he's preaching, and know there are people out there who need this type of advice, but I really struggle to understand where he's coming from sometimes. I think he really goes overboard with the debt shaming.

If I'm buying furniture and the store wants to give me 60 months at 0%, why would I ever part with my cash? I can put the $6k in a high yield savings account and get something like .7% right now. I know that's a shitty rate, but after the 5 years, the $6k is $6212. It's not much gain, but it's better than nothing and it didn't cost me anything.


Weagle25
Auburn Fan
THE Football State.
Member since Oct 2011
38845 posts
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re: Can Someone Explain Dave Ramsey's 0 Credit Score
If you don’t need credit and never use it then your credit score is completely irrelevant and thus you virtually don’t have one.

I believe that’s what he’s saying. Don’t think he’s saying your score would literally be zero
This post was edited on 9/13 at 11:49 am


FinleyStreet
Georgia Fan
Member since Aug 2011
6378 posts
 Online 

re: Can Someone Explain Dave Ramsey's 0 Credit Score
If you're a rich mother fricker, you don't need credit. Doesn't matter if your score is 0 or 850. Rich mother frickers don't have to worry about credit scores because they can pay cash for everything.

If I'm ever a rich mother fricker, I'll still have credit, though, because I use a credit card for travel points. Just because you don't need credit doesn't mean it isn't nice to have.


Weagle25
Auburn Fan
THE Football State.
Member since Oct 2011
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re: Can Someone Explain Dave Ramsey's 0 Credit Score
Credit is nice if you’re disciplined. I think his target audience is mostly not disciplined financially though.


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BhamDore
Vanderbilt Fan
Nashville
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re: Can Someone Explain Dave Ramsey's 0 Credit Score
Ramsey has the financial literacy of a stripper or rapper. I cant believe people listen to this guy religiously.


This post was edited on 9/13 at 2:21 pm


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castorinho
Oklahoma Fan
13623 posts
Member since Nov 2010
69496 posts
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re: Can Someone Explain Dave Ramsey's 0 Credit Score
You're overthinking this.
His point is that your credit score doesn't matter if you're not looking for loans (debt).
Whether you agree with that or not is a different story, but the point is pretty clear.


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BhamDore
Vanderbilt Fan
Nashville
Member since Aug 2009
5050 posts
 Online 

re: Can Someone Explain Dave Ramsey's 0 Credit Score
His advice on consumer behavior is spot on, but nothing revolutionary. His advice on finance is horrendously bad. It cal all easily be disproven with easy math.

His whole premise is that people are not disciplined enough to do the right things so do it my way.

He overly risk adverse to a detriment. Especially since money is historically cheap to borrow right now.

The returns on investments are easily triple that of interest rates.

Everyone should be investing right now and making minimal debt payments.



FinleyStreet
Georgia Fan
Member since Aug 2011
6378 posts
 Online 

re: Can Someone Explain Dave Ramsey's 0 Credit Score
quote:

His advice on finance is horrendously bad


I surely don't follow it for a lot of reasons, but it's better than nothing, which is what most Americans do.


AA7
Auburn Fan
Birmingham, AL
Member since Nov 2009
17323 posts

re: Can Someone Explain Dave Ramsey's 0 Credit Score
quote:

I surely don't follow it for a lot of reasons, but it's better than nothing, which is what most Americans do.

Agreed. You have to keep in mind his target audience are the people without a savings account and under a mountain of debt.


Im4datigers
LSU Fan
Northern Virginia
Member since Oct 2003
3285 posts

re: Can Someone Explain Dave Ramsey's 0 Credit Score
quote:

I don’t think it’s true. You build credit in just paying off your phone bill monthly.


You can’t be serious with that statement? Please tell me this is a troll post


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castorinho
Oklahoma Fan
13623 posts
Member since Nov 2010
69496 posts
 Online 

re: Can Someone Explain Dave Ramsey's 0 Credit Score
quote:

You have to keep in mind his target audience are the people without a savings account and under a mountain of debt.

which is what % of the population?
I hate one size fit all type guidelines like the ones he provides, but if some of these stats about Americans finances are accurate, then we should just let Dave do his thing honestly.
And hell, I know some high income earners that could benefit from it too.


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HarveyBanger
Member since Mar 2018
690 posts
 Online 

re: Can Someone Explain Dave Ramsey's 0 Credit Score
quote:

I don’t think it’s true. You build credit in just paying off your phone bill monthly.


This is just not true. Have you ever looked at your credit report? There is Jack shite on there about your phone bill.

Now maybe if you owed the phone carrier money for a phone on a payment plan or something like that they may send it to collections.

Same goes for household utilities


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Pelican fan99
New York Yankees Fan
Lafayette, Louisiana
Member since Jun 2013
22520 posts

re: Can Someone Explain Dave Ramsey's 0 Credit Score
Dave Ramsey is for financial dumbasses. There is zero reason to put your credit cards in a blender unless you have zero self control


EA6B
Navy Fan
TX
Member since Dec 2012
10602 posts

re: Can Someone Explain Dave Ramsey's 0 Credit Score
quote:

Dave Ramsey is for financial dumbasses. There is zero reason to put your credit cards in a blender unless you have zero self control


So roughly 98% of America.


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