The balance between paying down debt and savings

[iris lilies]

When I've pulled my free credit reports, it always says to increase my score, I should get a mortgage. That ain't likely to happen!

Both Dave Ramsey and Ramit Sethi scold their callers about worrying about a credit rating. In their worlds people do not buy things on credit. But isnt a credit rating used for things other than getting credit? For instance auto insurance rates? Or ?

otherwise, Yes, I agree with Ramsey and Sethi.

[Tradd]

Both Dave Ramsey and Ramit Sethi scold their calkers about worrying about a credit rating. In their worlds people do not buy things on credit. But isnt a credit rating used for things other than getting credit? For instance auto insurance rates? Or ?

otherwise, Yes, I agree with Ramsey and Sethi.

What’s interesting is I’ve heard people hosting Dave’s show - the ones besides him - who mention things about not trashing your credit rating with bankruptcy, turning a car back to lender, etc., as it will trash your credit. Makes no sense when they talk about not having debt unless you consider car insurance and such.

[ApatheticNoMore]

Both Dave Ramsey and Ramit Sethi scold their calkers about worrying about a credit rating. In their worlds people do not buy things on credit. But isnt a credit rating used for things other than getting credit? For instance auto insurance rates? Or ?

It is used by landlords to approve a tenant, and that's completely legal AFAIK. Credit rating can be used for auto insurance in most state except the practice is banned here in California and also in Hawaii, Massachusetts and Michigan. Use of credit rating in employment also depends on state. It is heavily regulated here, it can only be used for certain jobs. I've certainly worked jobs where it would be fine to run a credit check, but it's definitely not every job. But even though most jobs don't run them, I can't imagine any job caring about whether you got the tippy top credit score though ridiculous hacks, rather than just do you tend to pay your bills on time most of the time. And if they do you probably don't want to work for them anyway.

[rosarugosa]

I have a FB friend (whose life is the epitome of a dumpster fire), who is having a very difficult time finding housing due at least in part to poor credit. My team at my corporate job handled background check review/hiring decisions. We definitely considered credit, but not credit scores. We didn't even pull credit scores. We looked at unpaid bills, liens, collection items, etc. So there is something to be said for maintaining a decent credit history even if one doesn't plan to be seeking a loan or financing.

[jp1]

I'm curious how many people going to Ramsey and Sethi for advice would ever be able to buy a house with cash. I assume that the number would be approximately 0%. For the other 100%, if they ever want to buy a house credit scores matter.

[iris lilies]

I'm curious how many people going to Ramsey and Sethi for advice would ever be able to buy a house with cash. I assume that the number would be approximately 0%. For the other 100%, if they ever want to buy a house credit scores matter.

For many/most of the clients who talk to Ramit and Dave Ramsey they already own a house, so that’s where some of the pushback about ignoring credit comes from.

buying a house with cash is not all that impossible in flyover country. I realize your life is constrained by California prices.

and here’s an additional fact: —it’s not all that impossible to own a house and also have a vacation property in flyover country, all that paid for.

when you pay interest on anything, you’re losing so much of the value, so might as well pay cash, put your money in the bank, and save cash for the next big purchase, including cars and houses.

[catherine]

I'm curious how many people going to Ramsey and Sethi for advice would ever be able to buy a house with cash. I assume that the number would be approximately 0%. For the other 100%, if they ever want to buy a house credit scores matter.

Ramsey's position on buying a house is not to pay for it in cash, but to be sure to get a mortgage with no more than a 15-year term, For the reasons IL states (interest) as well as the top-loaded amortization schedules, I definitely agree with that. I have a 15-year mortgage.

And, as to the credit score question, Ramsey advises people to go to the banks and underwriters who take a more personal approach to underwriting. He claims they do still exist.

[iris lilies]

Ramsey's position on buying a house is not to pay for it in cash, but to be sure to get a mortgage with no more than a 15-year term, For the reasons IL states (interest) as well as the top-loaded amortization schedules, I definitely agree with that. I have a 15-year mortgage.

And, as to the credit score question, Ramsey advises people to go to the banks and underwriters who take a more personal approach to underwriting. He claims they do still exist.

oh, right! The 15-year mortgage, that’s right, that’s a good tool.

[jp1]

I suppose, Iris, that my view is skewed away from flyover country. Just got back from a work team away day. A couple of team members have bought houses recently so real estate was one of the big non work conversation topics that kept coming up. We’re scattered in LA, SF Bay Area, NYC/NJ, Boston, Hartford, Atlanta, Tampa, Dallas and Chicago. With the exception of Chicago housing seems pretty pricy in all of those places. Tampa and Dallas seemed to have at least some cheaper housing available too depending on what area one was willing to live in but the others sounded comparable to where we live in terms of average middle of the road housing.

[iris lilies]

I suppose, Iris, that my view is skewed away from flyover country. Just got back from a work team away day. A couple of team members have bought houses recently so real estate was one of the big non work conversation topics that kept coming up. We’re scattered in LA, SF Bay Area, NYC/NJ, Boston, Hartford, Atlanta, Tampa, Dallas and Chicago. With the exception of Chicago housing seems pretty pricy in all of those places. Tampa and Dallas seemed to have at least some cheaper housing available too depending on what area one was willing to live in but the others sounded comparable to where we live in terms of average middle of the road housing.

We think Chicago is expensive! I always thought Dallas was flyover-country cheap, tho.