Why Abandoning Your Credit Score Is Financially Risky: Debunking the Zero Credit Score Myth

When Dave Ramsey advocates for ditching your credit score entirely—pushing followers toward a zero credit score status—he’s promoting a strategy that sounds rebellious but carries serious real-world costs. While his anti-debt messaging has merit, his position on credit scores oversimplifies the issue and can leave followers facing unexpected financial hurdles.

Understanding What a Credit Score Actually Measures

The core misunderstanding in Ramsey’s framework stems from conflating credit scoring with debt dependency. A credit score is fundamentally a predictive tool—it measures your likelihood of repaying borrowed money responsibly. You don’t need to accumulate debt or pay interest to build a strong credit profile.

The mechanics are straightforward:

• Open a credit card
• Charge routine expenses to it
• Pay the full balance monthly

This approach generates positive credit history without ever paying interest. A single $10 monthly purchase, paid in full, contributes to building your credit standing. The scoring factors Ramsey criticizes—like length of credit history—simply reflect your demonstrated reliability as a borrower over time.

The Hidden Costs of a Zero Credit Score

Housing Markets Become Significantly More Complex

The housing sector reveals where a zero credit score creates genuine friction. Most mortgage lenders rely on credit scoring to determine both approval and rates. With excellent credit, borrowers typically access rates substantially lower than those with poor or nonexistent credit histories.

Ramsey’s workaround—manual underwriting from alternative lenders—requires extensive documentation (12-24 months of income and expense records) and severely limits your lender pool. As Ramsey himself acknowledges, “Not a lot of mortgage companies know how to do that.” This creates a practical bottleneck: instead of qualifying with most mainstream lenders, you’re confined to specialty providers who may charge premium rates or fees.

Renting faces similar obstacles. Property managers and landlords routinely screen applicants using credit checks. In competitive rental markets with multiple applicants, lacking a credit score becomes a disqualifying factor—an unnecessary disadvantage when housing inventory remains tight.

Financial Services Become More Expensive

Beyond housing, a zero credit score triggers higher costs across multiple services:

Insurance premiums: In 47 states, insurers use credit-based scoring for auto insurance rates. The financial gap is striking—drivers with excellent credit pay less than half the premiums of those with poor credit profiles in the same state.

Utility deposits: Water, electricity, and gas providers often require substantial deposits from customers without established credit histories. This upfront cash requirement strains liquidity for no legitimate reason.

Loan access during emergencies: While an anti-debt lifestyle is defensible, financial emergencies happen. A major unexpected expense exceeding your emergency fund reserve could require borrowing. A zero credit score eliminates access to personal loans or favorable 0% APR credit options when you need flexibility most.

The Practical Reality Check

Ramsey can afford to dismiss these concerns because his personal wealth insulates him from real-world friction. For most people operating with ordinary financial resources, maintaining a reasonable credit score isn’t a compromise on financial principles—it’s practical asset management.

Building credit through responsible credit card use doesn’t constitute accepting “debt culture.” It’s strategically positioning yourself to access better rates, broader options, and genuine financial flexibility when circumstances demand it.

The zero credit score approach doesn’t liberate you from debt; it simply makes every financial transaction harder and more expensive.