A Missouri man named Ren called into “The Ramsey Show” with a question that mixed personal finance with job stability. He had just paid off his car loan, but instead of feeling accomplished, he was worried.
Credit Score Drop Sparks Employment Fears
Ren explained that he works in IT for various financial institutions. As part of his contract work, his credit score is checked every six months. When his score dipped below 700 after closing an old auto loan, it set off a possible red flag. “They put it in the form of, ‘Hey, if you can’t manage your finances, then why do we give you access to other people’s finances?'” he said.
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But Dave Ramsey and co-host Jade Warshaw weren't having it. “They're not going to kill you for not having a credit score. They'll hurt you for having bad credit, right? But not no credit,” Ramsey said.
When Ren shared that he still had about $22,000 in consumer debt to go, Ramsey made it clear: becoming debt-free is the right move. If employers penalize him for that, Ramsey said, “These are people too stupid to work for.”
Ramsey told Ren to confront the people behind the contracts. “If I am financially irresponsible, yes, fire me. But I have no debt. That is not financially irresponsible. And that drives your credit score down.”
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He didn't hold back: “You’re so freaking scared. You’re not going to lose these accounts, man. When you go in and verbally accost them the way I’m describing and say, ‘I am financially responsible. I’m out of debt. The reason my credit score went down is not because I didn’t pay my bills, you doobers.'”
Why Ramsey Hates FICO Scores
Ramsey then launched into a takedown of the credit score system. He called the FICO score a “sucker score” that banks use to determine how much money they can make from someone via interest.
“If I wrote you a check for $10 million and you put it in your bank account, your FICO score doesn’t change one point,” he said. “You get completely out of debt and build a million dollars in your 401(k), it does not change your FICO score one point, except it will go down because you got out of debt.”
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Ramsey argued that FICO doesn't measure financial responsibility, just payment behavior. “The only way you get a 700 to 800 credit score is you have paid hundreds of thousands of dollars over the scope of your life in interest to a bank.”
He also shared his own FICO score: zero. “It’s indeterminable, which means I’m really off the grid. I must be financially irresponsible. I’ve got $600 million in paid-for real estate, but I must be financially irresponsible.”
Ramsey ended the call urging Ren not to live in fear and to stop “worshipping at the altar of the great FICO.”
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