Dave Ramsey Wrong on Credit Scores
Sully: Here are three reasons why Dave Ramsey is wrong on credit scores. I like what Dave Ramsey teaches I just think he’s missed the mark here on FICO and credit scores.
Ramsey: …Otherwise you’re going to be like everybody else and live paycheck to paycheck and car payment to car payment and credit card payment to credit card payment and we’re going to go into debt Why so we have the opportunity to run up our credit so then we can more easily get more debt, why because then we have the opportunity to build up our credit so that we can more easily go into debt and we live our lives trying to worship at the altar of the great FICO score. Instead of trying to build wealth.
Sully: Credit scores are used in many different industries including insurance auto and homeowners insurance, what consumers pay is going to be based on what their credit score is. If consumers don’t have a credit score they are going to pay more than somebody with a good credit score.
Ramsey: Your FICO score is not an indicator of your success, all you’ve done is successfully pay payments and interest to the bank it’s the only way you get a FICO score. I’ve got an 880 well I’m sorry that probably cost you about a hundred grand
Sully: I recently saw a credit report that only had a utility bill being reported and no other debt and it’s still scored in the 700’s. Consumers don’t need debt to have a good credit score if they have a credit card they could pay that off every month and never incur any interest charges and still have a great credit score. You don’t need debt to have a good credit score.
Ramsey: Of course you can get a house without a FICO score. There are two possible ways:
1. Dave up and pay cash for it which people do believe it or not
2. Get a mortgage company who actually knows how to write a mortgage without a FICO score.
Not all lenders know how, a lot of them are so stupid they only know how to look at a little number a monkey can make this loan. The lenders don’t know if the borrower got a job, but they will give him a dadgum loan. If you get a mortgage company to do manual underwriting, you can get the same mortgage that high FICO score boy can get. The exact same mortgage, if you want to go get a mortgage.
Sully: While there are no FICO mortgages out there, they’re a lot more difficult to get than one with a good credit score. If it doesn’t cost you any money there’s no reason not to get a good credit score. I would love to debate Dave Ramsey live about this if you guys know him, please connect me don’t forget still free for now until the new book comes out go to get loan ready to get the six steps to a better credit score.