Do you need a credit score? If you believe Dave Ramsey, the answer is no. Ramsey has repeatedly said that building credit is absolutely not necessary. In fact, in one YouTube video, a young caller asked about building credit to rent an apartment and Ramsey asked him point blank, “Why do you need to build credit?”

When the caller said he had heard that a credit score was necessary, Ramsey said, “Not true. That’s a lie that your friends tell each other.” So, is this advice true? Here’s what you need to know.

It’s possible to get by without a credit score — if you have to

Ramsey is of the belief a credit score is not necessary because you can always work around not having one. In fact, he told the caller that his staff had routinely called up apartments to ask if a student with no debt and no credit would be allowed to rent an apartment and had been told yes. 

Of course, it is true that some landlords will rent to you without credit. It is also true that some mortgage and car lenders will give you a loan if you need one, despite a lack of credit history. Plus, if you don’t want a credit card or plan to pay cash for everything, having a credit score isn’t really needed either. 

There is no requirement to have a credit history at all, and the less borrowing you do, the less it benefits you to have one.  However, that does not always mean that living a credit-free life is an easy thing to do.

Life is easier with good credit even if it isn’t necessary

While you do not need a credit score to rent an apartment or do other financial transactions, it does make it easier. Your credit score is a quick and simple way for companies to tell at a glance if you have mostly been a responsible consumer. Lenders, landlords, insurers, cell phone companies, and utility companies look at it to get an idea of whether you’ve done the right thing when you have done business before. 

If you don’t have a good credit score to prove you can be financially responsible, you can show it in other ways. You could provide bank statements, references from past landlords you’ve paid rent to, or even a record of utility bills paid on time.  You’re able to get all of these documents without borrowing, which is something many people want to avoid.

Of course, since companies are so used to looking at credit scores as a quick option to decide whether to do business with you or not, you may have a bit of a harder time finding goods and services. You may also be seen as a more risky customer, so could be asked to do stuff like make a larger deposit when you rent a property.

Should you aim for good credit?

So Ramsey is right you don’t need good credit, but should you aim for it anyway? 

In some cases, if you have been in trouble with debt or think you might get into trouble if you start borrowing, it’s smart to avoid credit and just cope with the workarounds. However, that is not true for everyone. If you want to have the easiest time with your financial transactions and you can trust yourself to spend within your means, you are much better off borrowing in a responsible way and paying your bills on time so you can build credit.

Using credit can also improve your life in other ways — as long as you can be responsible. A great cash back card can make all your purchases cheaper, while also providing protection against fraud and even offering extra benefits as well, like extended warranties.

The key is to not fall into the debt trap. Research and find the best card you can, buy all you can to earn rewards, and pay the bill off in full. You’ll avoid interest, get a lot of money back, and build a credit score so any company will want to do business with you. 

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