Dave Ramsey is Right

[Cotton_Britches]

After building my EQ score up to the high 600's, a new collection was added and it dropped 34 points. I'm starting to think that Dave Ramsey's plan of avoiding credit and eventually NOT having a FICO score is correct.

I'm sick of the yo yo.

[fused]

Hmmmm! What exactly did Ramsey say.

[Cotton_Britches]

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@fused wrote:

Hmmmm! What exactly did Ramsey say.

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He has a credit score of zero because he hasn't used credit in twenty plus years. His viewpoint is that the credit score is really a "debt score," and the only way to really be financially free is to pay cash for the things you want, and not allow yourself to be jerked around by the CRA's and FICO. 

Even the CRA's themselves will tell you that we (the consumers) are NOT their customers. The lenders are their customers. It took legislation, like the FCRA, etc. just to force them to give a hoot about the rights of consumers.

[JoeBJay20]

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@missypants wrote:

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@fused wrote:

Hmmmm! What exactly did Ramsey say.

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He has a credit score of zero because he hasn't used credit in twenty plus years. His viewpoint is that the credit score is really a "debt score," and the only way to really be financially free is to pay cash for the things you want, and not allow yourself to be jerked around by the CRA's and FICO. 

Even the CRA's themselves will tell you that we (the consumers) are NOT their customers. The lenders are their customers. It took legislation, like the FCRA, etc. just to force them to give a hoot about the rights of consumers.

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Ramsey has his good points, but he can also be a bit of an extremist.  He only focuses on the negatives of credit without acknowledging any of the positives.  Truth be told, people without the discipline to control their finances will get into financial trouble with or without credit.

[fused]

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@missypants wrote:

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@fused wrote:

Hmmmm! What exactly did Ramsey say.

---

He has a credit score of zero because he hasn't used credit in twenty plus years. His viewpoint is that the credit score is really a "debt score," and the only way to really be financially free is to pay cash for the things you want, and not allow yourself to be jerked around by the CRA's and FICO. 

Even the CRA's themselves will tell you that we (the consumers) are NOT their customers. The lenders are their customers. It took legislation, like the FCRA, etc. just to force them to give a hoot about the rights of consumers.

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Absolutely correct!

One of the biggest reasons I hang out in these forums is to share my experience and help others not to be victims. Banks, CCCs and other lenders will do whatever they can to take every penny we have. The more people they have in debt, the more they make. Over the years I've learned a lot, have changed my behavior and I have no debt even though I use CCs. The trick is I pay NO interest and I make the cards work for ME in the form of points and cash back. Once a creditor tries to mess with me, I kick them to the curb. I refuse to be enslaved by banks, CCCs, CRAs and so on.

[haulingthescoreup]

Brother Dave likes to say that he has a credit score of 0, but he doesn't, at least not a FICO credit score. There is no such thing as a 0 score in FICO. The lowest you go is 300, I think, and you have to be in abysmal shape to have that.

Instead, he has no score, assuming that he has no active credit lines, including a mortgage, that are reporting. He is living off the credit grid, which is fine for him, as I'm sure that he can pay cash for his home and his vehicles.

Most of the rest of us will need to finance a home, and possibly an auto, although I know that ferocious personal saving for years can allow one to buy a house for cash. It's a lot easier to qualify for a mortgage if you have a credit history. Otherwise, the lender has nothing to base an opinion on as to whether you will faithfully make your mortgage payments, and so you're going to wind up with a higher interest rate in most cases.

A credit score only becomes a "debt score" if you allow debt to accumulate. Pay everything in full every month, never be late on anything, and you will be fine.

CC's are great personal finance tools, if you don't let yourself get seduced into the Keeping Up with the Joneses mentality and go into debt to do so.

[Kiwill]

+1 to haulingthescoreup comment.

[llecs]

I like Dave Ramsey too.

[AndySoCal]

I differ with Hauling slightly. If Dave Ramsey has no active tradelines ETC ETC then he would not qualify for a FICO score. In that case his score is zero. If does have active trade lines etc the lowest FICO score you can get is a 330.  I also agree with Fused I love making my credit work for me not the other way around.