Dave Ramsey’s Credit Score Take: Mostly Right, But Not the Whole Story

As one of the biggest names in the personal finance community, when Dave Ramsey talks, millions of audience members listen. If you listen to his video podcast, even if you don’t call in, it’s a great way to listen and learn from the financial advice Dave gives out to others, who call in anonymously. 

If you are even a bit familiar with Dave’s podcast, it really shouldn’t come as a surprise that millions of people hang on his every word. His advice has helped many people, but like any other personal finance guru, this doesn’t mean Dave or anyone else is right 100% of the time. Nowhere is this more than with Dave’s take on credit scores and how badly they are (or are not.)

Good Advice Matters

The basic take on this is that Dave Ramsey has long claimed you can live without a credit score, and to this point, his website is full of articles that say as much. More specifically, these articles indicate you can buy a home, rent an apartment, and even apply for a job all without a credit score. 

This is really the only advice you need from anyone, Dave or your neighbor down the street in that you don’t have to shy away from having credit or looking at your credit score. There isn’t going to be an argument around whether debt is bad, almost everyone universally agrees with this. This is really where Dave’s argument needs to shift, in that he should be talking to people who can’t handle paying off their cards and not the cards themselves. 

Dave has long opposed debt, and in this regard, he’s not at all wrong, as debt is a bad thing to have, and it can really harm your financial future if you have too much debt. Where Dave is wrong is in saying that credit is only a false sense of security, as this really isn’t accurate to say. Debt is bad, nobody is going to deny that, but it’s a little more black and white than to just come out and say that all credit cards are bad and you should never have one.  

Say Yes to Credit

One of the things that arguably matters most here is that it’s really easy for Dave to play down the importance of credit card scores. For starters, he doesn’t have to worry about them at this point, but more importantly, it’s good for attracting an audience. The reality is much different than what Dave says on his show as it’s been more proven just how much credit scores can help you over your life.

There is no question that trying to get a mortage, renting an apartment, or buying a card with good credit is going to make things easier. The math is pretty telling in that someone with a good credit score is going to save thousands over the course of 30 years over someone with bad or no credit with a mortgage. 

This is why it’s so important to listen to the counterargument of what Dave is claiming about not need a credit score. The hope is that most people quickly realize it’s not the credit that is the problem, but proving to be responsible enough that you don’t have worry about using credit cards to drive yourself into debt. These are the scenarios Dave is really worried about, but he’s wrapping it up as a package deal in that both credit cards and debt are both mutally bad. 

Credit Card Benefits

You may never take advantage of any credit card perks, but knowing that they are available is something to consider. Purchase protection, extended warranty, rental car insurance, and trip cancellation insurance are also just a few of the extras credit cards provide to users at no extra charge.

Credit cards also offer much stronger fraud protection over debit cards and it’s something you hope you never have to find out. Should anyone ever steal your credit card and use it, you are going to find a lot of fraud protection, which isn’t something debit card users can say. 

Stick To A Budget

No matter if you have one credit card or seven, at the end of the day, it’s really important that you take what Dave is saying about credit with a grain of salt. The most important thing isn’t what Dave is saying, but what he’s not saying and that’s sticking to a budget every month. If you can pay off a credit card every month, most of Dave’s argument against using credit goes right out the window. 

This is why there has to be a middle ground between what Dave is saying about not worrying about credit and debt being a real problem. No one is arguing the latter point and nobody wants to have debt either, so people need to figure out how to either avoid debt altogether or learn to control their spending as to not get in over their heads.