Are Credit Scores a Scam? (Money Guy Reacts to Dave Ramsey)

Are credit scores a scam? Debt can be chainsaw dangerous, but it is possible to maintain a great credit score while having a healthy relationship with debt.

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[Woopigmavs]

Really impressed with how tactfully, respectfully, and unapologetically you guys are in disagreeing with Dave. He’s such an icon in financial media that it’s got to be hard to say anything against him, but the way you did it is very well done. He has helped so so so many people and still does, but his unwillingness to update his philosophy is becoming a real problem.

How many people listened to Dave and didn’t buy a house pre covid because he said they needed 20% down? How many people are getting higher interest rates because they don’t have a credit score or $20k laying around for a decent used car? How many millions have been lost in potential retirement accounts because Dave told someone to pay off their 3% mortgage?

[kennethwers]

If you pay your bills on time and use a credit card as a payment method, you will have a good credit score. But use it like a debt card(always has the money for the bill in the bank). One can even prepay your credit card as you would a debt card.

[wealthbytes]

A good credit score just makes life easier in many areas. They use it for cell phone contracts, renting, insurance, etc. While it shows how good you are with debt, if you are a responsible borrower, the score will follow and it just makes life easier. If you needed to get a loan quickly due to an emergency, having a great credit score makes that not only cheaper to borrow, but quicker to get approval.

[DadinWA]

majority of us need to borrow money to buy a house and car. Having a credit score is important but be responsible with borrowing money. Pay it off on time or earlier. I would like to see data on how many Ramsey followers really have a 0 credit score, don't use credit cards, and don't borrow money? Great video. thanks for sharing.

[melvinlee]

I went on vacation and tried to rent a car using a debit card...they flat out said they only accept credit cards, despite what Dave says...

[millievanillie]

I will say that on Caleb's financial audit, people will be in dire financial situations and have a dangerous amount of credit card debt, with no emergency fund. MOST of them then ask if closing a card or not taking out debt will hurt their credit score. The score itself should be the least of their worries. They have a misconception about how it benefits them to carry debt, not just using credit cards. I think Dave is getting at that mindset and speaking to those people, but is generalizing and not including those who are able to leverage debt in a beneficial way.

[freedomring]

I think Dave has outlived his usefulness.

[thenaturalmidsouth]

Ramsey is just ok. I have mortgage debt of about $100K and no other debt. The interest rate is 2.25%. The monthly note is only $830. I won't ever pay off a dime of it early. I'd much rather put dollars towards my HSA and 401k.

[saulgoodman]

No it is not a scam. You do not need to be in debt to have a credit score.
Dave just loves strawman arguments.

[QUESOesFANTASTICO]

Somebody needs to start showing Dave the door... 🚪

[__RD]

Its so funny that Dave always says: “No one became a millionaire with credit card points.” yet the vast majority of millionaires don’t leave that free money on the table

[ryanra]

Me and my wife use credit cards and we have no debt other than a mortgage. Why not use them and qualify for a good rate if/when you ever need to take out debt

[JosiahK]

a paid off credit card every month gives you a good enough credit score... i get tired of dave's over dramatization.

[jloop_]

Using a credit card for your bills and expenses and then paying them off has helped me build a great credit score. A good credit score is important for many things. Not just bragging about it.

[DaveM-FFB]

I have never made a financial decision with the motivation of improving my credit score. I believed that if I handled debt responsibly, I would always have a pretty good credit score, which would entitle me to lower interest rates, and access to business loans which would allow me to grow my business.

[sarahphillips]

Also want to state: I only use cards online or when traveling. Ive gotten my number stollen before and the company took care of it. Using only your debt card can also be risky

[Jarlus]

The problem with Ramsey is that he leaves so little room for nuance. The reason people get in trouble with credit is that they repeatedly use it to cover expenses they otherwise have no means to pay (and no immediate prospects). Folks in that situation probably should not be using credit cards until they either solve their income problem or their spending problem (could be either). But I agree that a blanket "credit cards are the devil" approach isn't necessarily useful for everyone, they're simply a tool one has to learn to use properly.

[nicholasdean]

If anyone had to make an emergency purchase, their credit score tanks. If they pay on their due day after the reporting date. I dont know anyone who says I need to go into debt to increase credit score (who understands it). There is a rumor that paying minimum increases your score. Its the classic I dont need debt so they want to lend to you. While if you need debt they wont. The exact same thing happened to Silicon Valley Bank. They announced massive losses then decided to ask for funding in the open market. (no one took the bait)

[MasterKenfucius]

Ramsey is a showman. That's about it. He knows people pay attention to a great talker and he takes advantage of the simpletons. He puts you down and then tells you he's got all the answers. No, he's not your best chance at getting ahead. He's the Suze Orman of the male world - full of hot air.

[JosephDickson]

100% DR uses a scoring service to assess the risk of hiring potential employees. The guy is full of it.