Dave Ramsey Financial Peace University: Week 5

This week’s lecture was about credit reports, credit reporting bureaus, identity theft, and collection agencies. Quite a scattering of topics. The first part of the class was on credit scores and credit bureaus. Dave makes the point that a FICO score is an, “I love debt score” because the only way to get a FICO score is to carry debt. Technically this is true and Dave is very proud of the fact that he doesn’t even have a credit score because he’s gone so long without carrying any debt. He argues that your goal should also be to not have a FICO score. However, Dave’s assertion that you don’t need a credit score is wrong for most people.

Even if you ne

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7 Responses to Dave Ramsey Financial Peace University: Week 5

  1. Rick says:

    I agree with your FICO Score assessment. For us less than wealthy people, a good FICO Score is a necessity.

  2. Jackie says:

    When I get an unsolicited credit card application, I simply cross out the various sections and write “please take me off your list” in marker. Works and is totally free to me. I hardly ever get any junk mail from credit card people anymore.

    I have to agree, for most people a good FICO score is at least very useful. There are plenty of people out there who don’t really need it, who aren’t rich, but the majority of people in America today do need it for insurance, home loan interest rates, credit checks at work, etc. I think it’s a tad irresponsible to simply advocate that you don’t need it, instead of explaining why you may or may not.

    I’m so glad he gave info about checking credit reports though. It took me about 3 seconds to google this statistic:

  3. Rhonda says:

    FICO scores are only important if you want more debt, (a car loan, mortgage, etc.) If you pay for a car with cash, pay off your house and credit cards, FICO scores are meaningless. As time goes on, and banks continue their terrible debt toll on the American public, more folks will pay off their cars and keep them practically forever, pay off their houses and stay put and learn to live without credit cards. Banks will suffer because they will no longer be able to use higher interest rates to gain wealth at the expense of the consumer via FICO scores. Become as debt free as possible and work for yourself. This is essentially what Ramsey is saying.

  4. I am an FPU alumni and I didn’t always agree with Dave. Over the years I have come to realize that when he says something like “you don’t need credit score” he is painting a bigger picture. he is not always talking about the here and now.

    Sure I may need to rent an apartment today, but I hope I don’t need to 10 years from now (especially if I follow the steps)

    Have fun in class!

  5. Robert M says:

    Maggie,
    I do appreciate your synopsis of each lesson. I admit I have not read them all, but the ones I have read have been informative.

    However, I have to call you on a couple comments you made and maybe get clarification.

    You stated “Even as the members of this class pay off debt they still need to keep a decent score and that means keeping at least a credit card or two or a mortgage.”

    I am not sure why anyone would want to continue to pay interest to save on car insurance. I paid $4,000 in mortgage interest last year. My car insurance cost was $1800. The math does not work. Also, many so called financial experts agree that we spend more when using a credit card. I have heard all the stories, and I thought me and my wife were different, but it turns out we were not. We were below the average but still spent more using plastic rather than cash.

    We have no credit cards and are quickly paying off our mortgage.
    Yes, we will loose the tax deduction. But, my calculator says it is better to pay the government $250 rather than paying the bank $1,000 to save paying the government $250. We will have a net gain of $750 without mortgage interest to deduct.

    Regarding the ID theft insurance. I agree that everyone could do what Zander does if your identity is stolen. I did it back in 1994. I have to say “WHAT A MESS!!!!”
    I will, and do, gladly pay the $12 monthly fee so I will not have to go through that time consuming mess again.

    Zander does not protect your identity. That is up to you. They only restore your identity and clean up the mess, reimburse expenses after it occurs. NO ONE can protect you from identity theft better than you. I do not care to pay for a company to monitor my credit.

    Thank you for sharing your victory stories. They are important for people to hear. I would encourage you to bring up during class some of the doubts you have. I am sure you are not the only one.

    Continue to question and search for truth.

  6. NoDebt2 says:

    Its absolutely NOT necessary to pay any interest whatsoever & STILL have an excellent credit score.

    A good FICO score is categorically NOT an “I Love Debt score.” It is an I LOVE TO PAY ALL MY BILLS ON TIME score. While I still have a small bit of a mortgage left, that is the ONLY interest I’ve paid in YEARS, but I DO pay greatly reduced insurance premiums — my insurer offers a discount for those who have excellent credit ratings (its actually an “I’m a Responsible Person Who is Less Likely to Have an Accident or Claim Score” as far as they’re concerned.)

    Many employers & almost ALL landlords use the FICO to quickly determine if the applicant is a good risk, based on if they pay their bills on time, and handle credit adequately well.

    Just de-bunking another Ramsey myth….

  7. Nolan says:

    “(CC companies) already know that they are dealing in iffy practices, so wasting paper to tell them that seems futile to me.” Why would you want to do business with someone like this if you believe they are not honest and forthright? You are making CC work for you, but you are the exception. One day they will turn around and bite you and you have to decide if the measley rewards are really worth the agrevation of keeping up with the bills, the occasional late fees and/or annual fees, etc.

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