Thanks

Of course, this sort of approach could be a recipe for disaster if you don’t have your spending under control, but… It works for us. On top of that, we earn much better rewards than are typically available for debit cards.

The bottom line is that if you want to be on the credit-grid, go ahead and do what’s needed to maintain a healthy FICO score. If you’re going off-credit-grid, who cares? So what if you pay more for insurance or have to make a deposit with the utilities company…you’re still money WAY ahead because you’re completely debt free.

For me, I couldn’t care less about my credit score. I’m self employed, live a cash lifestyle, finance the biz on a cash basis, and won’t require another loan so long as I live. The net result…I don’t care. Besides, with all of the new PF sites like Thrive, Mint, etc., I think we’ll be seeing a more accurate scoring system of your personal financial health sooner than later. Always remember that FICO was developed for lenders, not consumers.

@ Nickel – when you say you use credit cards for convenience, what convenience do they offer above debit cards? I’m curious as to your perspective on this.

The reason it’s stayed that way is because I care deeply about staying away from the irresponsible behavior that would cause my score to go down a lot.

My employer checks prospective candidate’s credit report before hiring them–just to make sure that person does not have any items in collections or past due accounts (thus making them more likely to steal money). But I’ve never heard of an employer looking for an ideal credit score range.

That being said we are in the process of a re-finance and both our scores are above 730, the minimum they were looking for to give us the lowest rate possible.

Insurance companies use the information contained in your credit report (and no, they do not need your social security number to do this anymore) to calcluate their own score. Your credit history does play a major role in the price of insurance. You cannot be denied insurance soley based upon your credit, but they can change you such a rate that you wouldn’t want to pay it.

I’ve worked in insurance for the past 11 years, both as an agent and in a home office function.

Like it or not, your credit report will affect how much you pay for insurance. Even if you don’t have a credit file, you are still not going to receive the best rates.

“Like it or not, your credit score does matter, even if you don’t intend to borrow money. In fact, insurance companies, utilities, apartment complexes, and even prospective employers regularly check credit scores.”

If you are a homeowner, then renting an apartment is of no concern
IF you already have utilities, then you score is of no concern. At most, utility companies require a refundable deposit retuned after 6 months or consistent payment. Here it is $100 – or you can have an existing customer co-sign.
Most employers do not check credit scores, and not not using credit will not keep you from getting a job. I can’t think of a single instance where explaining you are completely debt free would be bad.

Ahhh, the insurance score. Not the same as a credit score, only one of several other components that go into evaluating insuance risk, and the insurance score by itself cannot influence rates or coverage approval/denial.

And when you stop using credit all together, your score doesn’t continue to go down. I see scores every day. They don’t have a score of zero, they have NO SCORE. No Score is different than a bad score.

You can still get a mortgage with no score, or a car loan, or many other types of loans, even though you shouldn’t be borrowing money.

The point is Ramsey is right. Forget about your credit score. You will live just fine without it. If you never use credit, have no credit available, pay off and close every debt and never play the game again, you will still get insurance, still get utilities, still get hired, and still live.

A credit score is only useful if you plan on borrowing money again. If you don’t, it doesn’t matter.

I agree that it’s smart to take care of your debt and shoot for the goal of living your life free from those burdens. But the two things go hand in hand. If you rid yourself of debt, your credit score will likely be high and healthy, and you’ll gain access to that wonderful “savings club” that a stellar credit score affords you.

With that being said, one of my co-workers is currently attending his FPU (Financial Peace University) course. Last night’s lesson was you guessed it – monitoring your credit score.

If Ramsey has such a total disregard for FICO scoring then why would he stress the importance of monitoring it in his coursework?

And remember – Ramsey is a millionaire. If I had that kind of money I seriously doubt that I would care that much about my FICO score either…

I’ve devoured a lot of Ramsey material, FPU, books, radio, television and have never heard him make a point that indicated he believed you should totally ignore your score. He doesn’t want you to prioritize your score over certain other things (which are controversial).

Ramsey certainly has straw men, but in my opinion this just flat out isn’t one of them.

I suspect (and hope) that in the future, the credit score will again mean something in regards to getting good loan rates (or perhaps even loans in general).

Ramsey is great for those in a mess or those who aren’t bright. But for those who are and have been responsible, his ‘rules’ are nearly pointless. Go ahead and start the vitriolic defense of DR.

“when you’re not borrowing money, your credit score will go down… your FICO score is an ‘I love debt’ score…”

(That’s an actual quote from one of his shows.)

He’s not talking about a “temporary ding” to your credit score here. Rather, he went on to argue that it will go down, and that you shouldn’t care. I disagree on both points.

First, your credit score will likely rise as you get your financial house in order and, contrary to popular belief, it won’t suddenly go a cliff if you stop borrowing. The is especially true if you simply pay of your debts but leave the accounts open. Why not? It doesn’t hurt anything to do so.

Beyond that, as I’ve detailed above and elsewhere (and as you yourself have acknowledged), there are good reasons to care about your score.

Dave Ramsey uses the “don’t worship at the altar” quote in reference to cutting up and canceling credit cards. And occasionally in reference to having multiple types of debt.

I also find it hard to believe that anyone would advocate maintain reoccuring debt for credit score purposes. But that’s not the context he uses that phrase in.

My credit score is 760+ and I’ve never had a mortgage. In addition within the last year, I literally canceled all of my credit accounts. Some people think the actually canceling of the accounts is dumb because it hurts the length of credit history and your score.

Dave’s view is that maintaining intensity, passion, and commitment are more important than a temporary ding to the score.

The guy who commented on your last thread was just a little off base, that’s all. I’m one of the most passionate anti-credit people you’ll find, but I would never advocate ignoring your score completely and neither does Ramsey.

My credit score is 846. I have no debt at all, and haven’t for years. My score was much lower when I had debt. Now I use a non-revolving Amex for everything.

Some credit monitoring services even allow you to lock your credit report to protect it from being hurt by fraud.

The only reason I would really care to keep it decent would be for another mortgage but I’d really like to pay cash for every single thing I ever buy.

I do check it once a year for identify theft